We had a great run playing FB long, as you know I have been looking for a pullback to consider starting a new long position. As of last week I was wondering whether we were seeing that pullback or a trend reversal. Today we have some more information that seems to suggest it may very well be the pullback I had warned we might see in this area some time ago when the long trade first started.
Back when the trade first started I warned that this level of resistance may see FB back off from the area, gather some strength and try to break out above this level. As a reminder, I'm no FB fan, but we did get a solid signal and a solid long trade.
The 60 min chart when it first went positive and around the time we were entering long FB trades (Calls and longs). The 60 min chart has been more or less in line, it hasn't turned negative on us.
The 30 min chart did turn negative and this is part of the reason I was looking for a pullback and also part of the reason I was concerned last week that this may be more than just a pullback as 30 min is a pretty long timeframe for a pullback move, however....
Since the negative divergence and pullback started the 3 min chart is already showing a positive divergence in to the pullback. It is not strong enough yet to have effected the 5 min chart, that may be something I'd like to see before entering a new long position. We may very well see more pullback or consolidation, we ant to continue seeing this positive divergence build in to that pullback or consolidation (lateral trade).
On a 5 min chart we can see the positive sending FB higher, the confirmation of the move up and then the negative divergence, this is strange to see, a 5 min chart still negative with a 15 min chart positive, but as you may recall, last week we did see an accumulation event rather than a process that skipped the shorter timeframes and went directly to the longer ones. This 5 min chart also would suggest to me that FB is not quite there yet, but certainly worth keeping a close eye on as a break out above those resistance areas would send FB in to stage 2 mark up.
Here's the 15 min chart (pretty powerful timeframe) and a fairly quick leading positive divergence in to a flat trading range where we often see divergences.
The intraday 1 min chart still seems to suggest more pullback or consolidation as you can see the negative divergence that finally turned FB down.
A closer view of the 1 min chart, this still looks like FB wants to pullback or consolidate a bit more.
In conclusion, I know there are some strange charts there, the interpretation I have is that the 15 min chart is showing the typical positive divergence in to a normal, healthy pullback that we want to see, the divergence is not yet strong enough to have migrated to the 30 min chart which is something I'd like to see. Locally the shorter intraday 1 min chart is suggesting FB pulls back or consolidates some more, but this is a much different looking set of charts than last week when FB just looked bad on the pullback.
I have a feeling FB may very well offer us another long opportunity at better prices, but for now I'd be a little patient with it and let these charts develop and let the market tell us when or if the timing is right, however I did want to show you the improvement over what we saw last week.
No comments:
Post a Comment