Facebook (FB) is technically a late-stage failed-base (LSFB) short-sale set-up. The stock has rallied back up to/through the 200-dma and the underside of its prior base. We think FB is susceptible to the "valuation trap" since it is viewed as "cheap," selling at 19x 2019 earnings. This is similar to Apple (AAPL) in 2012 when it was selling at 12-13 times earnings. We wrote an article in Forbes about this: https://www.forbes.com/sites/greatspeculations/2012/11/13/looking-at-the-real-worm-inside-of-apple/#20278f8f3da1
FB is triggered on a breach of the 200-dma using the 180 level as your maximum upside guide for a stop, although we would likely use the highs of yesterday as a tighter guide. Disclosure: We have been testing a position in the stock short over the past few days to try and get a "feel" for it, so we may be short the stock from time to time depending on how it plays out.
Short-Sale Set Up - Facebook (FB)
|Published:||30 Apr 2018 11:44 ET|
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