FB Swing Trade

Dec. 14, 2012 10:08 AM ETMETA
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Contributor Since 2012

Former Institutional Fixed Income Sales Trader Swing Trader Surf The Wave Manage Your Risk Have A Plan Execute

Been long (FB) since November 21th, when it broke into its gap area, which was formed overnight on July 26, 2012 after it reported earnings. My attention was drawn to (FB) on November 14th after it had a large expansion bar. This was the first clue that someone was getting heavily involved in the stock. Good accumulation and price action continued to and through the $24 price area where I got long. The next day the stock tested my emotions by immediately pulling back but volume was significantly lower than the previous days so I decided to let it ride. My initial position was a feeler position (1/2 size). Once (FB) filled its gap it was a question of whether it could hold the gap fill or not. Price action was a bit choppy as it rested above the 26.73 gap price. During this time period there was one clear distribution day but it failed to re-enter the gap area, which to me was a good positive sign. Shortly after all this it was announced that (FB) was being introduced into the NASDAQ 100. I guess the large institutional guys had gotten the memo and had been buying into the announcement. After the announcement it was time to sit and watch how the price reacted. Did all the big players already buy everything they needed? Would the price drift lower? All the while the 10day moving average was moving higher and giving support. Soon the chop/rest created a small handle/flag on the dailies. Today I bought more (FB) at 28.25 to bring my position into full size. As I write this volume is running about 80% the 20day average... that is impressive at 1:30est. Less than an hour ago someone cracked (FB) around the buy pivot. I hear it was a 3million share order. Looks like someone was testing the market to see how it would react. It was so lightening fast that it took out stops and snapped back. Initially it was a good reaction. Whoever it was couldn't get the ball rolling downhill. Positive sign but it definitely has my attention. Lets see how we close the day. Would love to see it close above 28.50 which is around the point of control on this bad boy for today... after this it would be nice to see a follow through tomorrow. Overall the price action in (FB) has been great considering the overall weakness within the US equity markets as of late. Good luck trading.

UPDATE: Price continued to sell off a bit but selling seemed to have dissipated toward the end of the day and price action rallied into the close and closed a penny below it buy point. Positive overall.

Disclosure: I am long FB, GOOG.

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