Thursday, July 25, 2013

Facebook (FB)...

Facebook reported earnings after the closing bell yesterday. According to CNBC " The social media giant reported revenue of $1.81 billion, up 53 percent from $1.18 billion a year earlier." The stock responded very well to the earnings news, gaining as much as 20% from yesterday's closing price. As of right now it is looking to open up in the vicinity of $30-$31 share price.

In the chart above we take a look at the technical picture and the price action in this stock since it's IPO. Even with it's 20% gain today it still trades below it's $45 IPO price. In fact the share price fell some 60% in the months proceeding it's initial public offering.

The dark grey horizontal line points out the midpoint of the range from the all time highs to all time lows. As we can see on the chart after it's swing low in the $17 price range, the share price traded inside a roughly $7 point range, broke out to the upside and proceeding to climb to the top of the next projected range high roughly the same length in terms of points, as the first. This range high also coincided with the midpoint and provided strong resistance.

Support was eventually found at the trend line and 61.8% retrace level and with today's big open to the upside, I think it's a high probability that we end up at some point re-visiting the previous high at $32.50. The next measured move target above comes in around $37.50.

Support below now stands at $29 and $27 respectively.

UPDATE: 9:52 AM EST: Shares of Facebook have opened around the $34 price level. I think this means a move to $42.50 and higher is now underway. Support now stands most likely around the $31 level which represents the midpoint of the trading range.