The crackpot notion that investors collectively are all-knowing and all-seeing has suffered yet another embarrassment with Facebook’s whoopee cushion leap in after-hours trading. The 22% surge (see inset) dwarfs the bullish hysteria that greeted Apple’s lousy earnings report earlier in the day. It also puts in play the 36.49 target shown. Traders looking for the easiest way to get aboard belatedly should view a pullback to the 29.58 midpoint pivot as a great opportunity. ______ UPDATE (8:09 p.m. EDT): Yesterday’s lunatic leap got within 61 cents of our 36.49 target, a Hidden Pivot midpoint resistance. Traders can try shorting from 36.44, but I’d suggest risking no more than 12 cents theoretical per round lot on the stop, since this gambit will entail stepping in front of a speeding projectile. Assuming DaBoyz don’t gap the stock on the opening bar, there could be a bull play here as well. If you use a camo approach for the short and the trade survives, please let me know in the chat room and I will establish a tracking position.______ UPDATE (July 28): The 36.49 target is still valid — and so, therefore, are the tactics noted above. ______ UPDATE (July 30 at 12:50 p.m.): DaBoyz easily popped the stock through 36.49, implying they’ve got bigger things in mind. If you reversed a long position to get short at 36.49 with 12 cents of risk, the pain would have been negligible. Now, use the 40.53 target shown (a new chart) as a minimum upside projection for the near term. This of course implies that trades should be done from the long side until such time as the target is reached.
