It’s been a while since I looked at Facebook’s charts because, well, the stock was just too boring to care about for a few months. Zuckerberg was under fire for intruding so profitably on our privacy, and one might have gotten the impression from the news media that merely kowtowing to his critics would hurt Facebook’s bottom line. In retrospect, with the stock once again in vertical mode and presumably headed into the ionosphere, we begin to understand that revenue growth was never even slightly endangered. Moreover, it seemed even at the time that most of his critics — especially the dim bulbs and preening jackasses who sit in Congress — were left clueless attempting to discover how Facebook actually mines data and turns it into gold. So are the rest of us, to be fair — and of course there is the Brussels contingent, which will continue to extort too-big-to-leave-alone U.S. web-based interlopers with huge fines.
Privacy Zealots
But we should at least be able to recognize that none of us, even the most zealous advocates of ‘privacy’, will ever be able to gain a step ahead on Facebook so that we might impose constraints on them. Facebook has become so ingrained in our culture for a reason: the company knows pretty much everything about us. For all intents and purposes, Zuckerberg and his squad are HAL 9000, the omniscient computer from Space Odyssey that turned evil. We can only hope that Zuckerberg is a nicer guy than HAL.
And now to the technical picture. Facebook shares look bound for the 199.78 target shown in the inset, and we shouldn’t be surprised to see the stock stall there, or within pennies of it. But if it can close for two consecutive days above 199.78, or trade intraday at 206 or higher, it would become an odds-on bet to continue at least to the 229.57 Hidden Pivot labeled in the chart. That number is sufficiently clear and compelling that we might look for a major top there that will be worth shorting in any case. In the meantime, your trading bias should be bullish. _______ UPDATE (June 14, 11:01 p.m. EDT): The stock is an inch from the 199.78 target. You can fade the trend with any puts you choose, but don’t bet any more than you would on a Trifecta that includes a 15-to-1 nag. ______UPDATE (June 17): The target is still viable, so my recommendation to buy puts stands. _______UPDATE (June 18, 9:33 p.m.): The stock got within 20 cents of the target, which remains valid. However, because the trade seemed to generate little heat in the chat room, I can only assume no one is interested unless FB touches 199.78. As you please — fire at will. _______ UPDATE (June 19, 7:20 p.m.): I’m no longer recommending the short, but chat-roomers and Pivoteers please note: There may be a bottom-fishing play based on a downtrend reversing from the midpoint Hidden Pivot support of this still-developing pattern. _______ UPDATE (June 20, 8:49 p.m.): A gap-up opening left our chintzy bid choking on dust. The way FB handled the midpoint resistance, it should have little trouble achieving the 206.94 target shown in this chart. _______ UPDATE (June 25, 9:50 p.m.): As you will already know, the stock — like AMZN and NFLX — died a smidgen shy of a clear, compelling and important target I’d proffered. The action is bearish for all three stocks, but I’ll eschew a Tuesday forecast for this one because of the friskiness of the short squeeze in the final 40 minutes of the session. _______ UPDATE (June 26, 8:49 p.m.): Today’s measured rally exceeded the midpoint pivot, but not by enough for the 201.48 target shown in this chart to be considered a lock-up. Even so, FB’s ability to close above the red line suggests the outcome will favor bulls, producing a run-up to at least 201.48. A precise stall at that price would be likely, given the way buyers interacted so delicately with p=298.86.______ UPDATE (June 27, 9:56 p.m.): Like AMZN, the stock rallied on the opening bar into the gap created by Monday’s plunge; then it died — less than $1 from the 201.48 target flagged above. Look for the selling to continue down to 191.62, the target shown in this chart. ______ UPDATE (June 28, 8:38 p.m.): The 191.62 target remains viable, although I am not recommending a ‘mechanical’ short from x=198.47 because the low of today’s swoon exceeded the ‘secondary’ pivot at 193.90.