FB Update

I warned last week on Wednesday that FB looked like it was going to pullback and closed out the September $21 Call position that day. In fact, FB was closed at 3:55 on the 19th when it was around $23.25, it was virtually the top.

From that post...

"I think this one is going to pullback soon so I might as well take care of this now as I doubt it's likely to get better."

Today FB made good on that pullback, although this is a bit more extreme than your typical pullback.

Here's when/where the FB Sept. $21 Call was closed, everything after that was just market risk/opportunity cost.

From here, where is FB likely to go?

 Although an ugly day, it doesn't do much damage to the base we expected to form back at the start of August, in fact thus far it's quite a bit bigger than I thought it would be. Today's price action introduces a bit of symmetry in what appears to be a H&S bottom with the right shoulder starting today.

 The 5 min chart shows the divergence on the 19th right where the Call position was closed, from there a leading negative position that price has just caught up to, reversion to the mean.

 Thus far the short term charts are in line at best like this 3 min, but that's an improvement over a leading negative divergence, we want to watch for strength in underlying trade to build in here and we will likely get another shot at FB at much better prices and lower risk and what seems to be improving probabilities for a decent move higher as FB has been one stock that has had no problem at all bucking the trend of the market, both up and down.

 The 60 min chart shows where positive divergences have come in to play at the lows and where the negative divergence is recently, although...

 From our first long trade in FB (and some members made well over 100% with calls, I think 1 member made almost double that), the position of 3C now vs back then at higher prices is more favorable, the base would also be about 5-6x as big.

The 4 hour long term chart still looks very good with a new leading positive high and not even the 60 min negative divergence shows up here, so I'd still consider this a good opportunity to keep close tabs on with a lot of upside potential.