FB Update

I have mentioned a few times here and numerous times in email questions that I think FB will be higher on the day lock-up of insider shares expires which is today.

The move may not be exactly what I was hoping to see as 777 million shares are available to be sold today with the lockup expiration, still a 1 day nearly 10% move is interesting on a day when everyone expected the exact opposite as the shares hit the market.

This is a bit of a strange position for the charts because I really have no idea how they will or should react to the dilution. If you entered FB around the same time as trade alerts were put out, you should be up over 10% right now. If I had a larger position I'd probably take half off the table, I'm really looking for the bigger picture of a base in FB, but these are somewhat uncharted waters.

If this were a larger position, I'd probably take at least half off the table and run a tight stop on the rest until we get some data after today to be sure we are still dealing with a base.

Here are the FB charts...

 Here's the daily chart, we saw something at the green arrow and I think we were literally the only ones long FB among retail as FB was one of the most hated stocks at the time. Several members made +200% with calls, many more made a decent return just long the stock as we saw a huge leading 60 min positive divergence, that was a leap of faith, but like I always say, "I can't ignore signals like that"

We were pretty much out at the red arrow as negative divergences became apparent, the plan was to look for a pullback to get long again, but that never came. At the yellow arrow we had a short term long trade that was predicted to be short in nature the day I put it out, in that same post I said, "I don't think FB is going too far because I believe it's going to form a base". The white area is what we have been looking at as a large base in FB.

 
 On a long term 2 hour chart you can get some feel for how positive the leading divergence was in our first long trade in FB back in June, you can also see the negative divergence that told us it was time to wrap it up. However since then, we not only have a huge relative positive divergence from the June lows to the area that appears to be a base, this would also be considered a large leading positive divergence.

 This gives you some idea of where the positive divergences where, where you'd expect them- at the lows and pullbacks. The gap up we recognized as being sold in to and had been looking for an area in the pullback where it made sense to buy or add to FB, I never finished adding to the position as you can see by the size (50% of a full position).

 The 30 min chart is much better for details, again the lows are accumulated and the highs are sold, we do have a leading positive 30 min chart, but I want to see what happens after today's un lock of 777 mn shares, does this leading positive hold?

 The 1 min chart looks pretty positive, but if I were going to take some profit or even all of it, I don't think I'd wait around too much longer. I do like the idea of having some exposure to the potential large base as it could launch a huge move at this size, but I wouldn't want it to compromise my risk management; it would still be at or under 2% of portfolio as the risk/loss money.

The 5 min chart is interesting too as it shows the positive divergences leading to this launch and right now is perfectly in line. However in line is trend confirmation, it is not a positive divergence, another reason I would look at taking some off the table. If we were not in the middle of a lock-up event, this would be VERY bullish for FB's base, I just don't know how these 777 min shares will effect our readings until we have a couple of days of data.