FB Follow Up

FB doesn't look like a textbook H&S top, but that's where people miss a lot of good opportunities as only about 5% of H&S tops look like the cherry picked textbook examples, however, the volume confirmation as an FB H&S top is absolutely perfect and whether it is or not, the volume in the area is very bearish (high on the declines, fading and low on the rallies and getting worse the further to the right the chart moves.

 When FB was the MOST HATED stock as it came out as a new issue, we were probably the first in the retail crowd to see past that and trade it long at the white box to the left, we actually bought on the low of the move and had a nice run in FB, it has given us good signals for a while. This is a 5-day chart and it is proportionate for the 4 stages and the H&S top is the right size considering stage 1 and 2.

This is resistance in FB, I haven't seen overhead resistance like this in a while that is so persistent, but there are multiple attempts to break it and all have failed. This area would be the right shoulder where volume has fallen off dramatically.

 This is the daily 3C chart, you can see the initial accumulation when we first went long FB in 2012, the current divergence is by far the largest FB has seen.

As for intraday, it looks like there's month end selling in FB

3 min

10 min- the selling is strong, but specifically the last 2 days on a tactical basis, the daily chart shows there has been a lot going on for a lot longer time on a strategic basis.

This is a pretty intense 30 min negative for the last 2-days so there's excellent confirmation of month end distribution.

Today's daily candle too looks like a Doji Star, loss of all momentum and a common downside reversal candle.

And this is the trend of the 60 min chart in the area of the H&S pattern.

There's really not that much risk as a stop can be placed a few percent above, as long as it's not an obvious place and I prefer mental stops.