This is a WEEKLY chart of FB. You may need to look at the daily chart to see some of the things I am talking about.
If you are a bear, you probably pondered this question all weekend. Last week was not such a great week for Facebook. And Friday was not a good day for Facebook. You had to be wondering if there would be continuation to the downside as this week began.
FB reached a high of $86.07 on 3/24. Since then, the highs have been lower and lower. Even today, after a good day for FB longs, there isn't a clear sign that FB is headed for new highs. In fact, at this moment in time, FB is still under the downtrend line that starts on 3/24 and touches the tops of the candles from 4/13, 4/14, 4/15. The top of today's candle also touches that downtrend line. Remember, the trend hasn't changed until FB closes above the downtrend line. Even then, we like to see follow through. Also called continuation.
If you were short on Friday, you had to be nervous when FB gaped up this morning. At some point you had to get out of the way. When? That depends on the trading plan you had when you went short. Maybe you said, "if FB gets above Friday's high then I will get out". Or maybe you said, "If I lose $100 I am out of here!". Whatever your plan was I hope you stuck with it. Maybe you said, "I will stay with this FB short as long as it remains below the downtrend line from 3/23". If that was your plan then you are still long. You may be nervous. But you are still long.
If you came into today noticing that FB gaped up, You could have waited 15 minutes (or less), went long and set your stop at the 15 minute low of $81.24. If this was your plan you are still long. Why? Because FB never got that low again all through the day.
If you came into today thinking FB would rally into earnings and you wanted to be long. You could have used the 80.75 ish level as your stop. If this was your plan you are still long. Resistance can (and often does) become Support. In this case, it looks like it has.
So what now?? Will there be continuation?? You know what I like to say... Your guess is as good as mine. If you asked most shorts on Friday they would have been pretty comfortable with their chances for continuation to the downside. If you talk to most longs today they are probably pretty comfortable with their chances for continuation tomorrow. We will just have to wait to see what happens.
A better question may be, "What should I do from here?". Honestly, only you can make that decision. But if you use the Daily downtrend line as a guide you may have an advantage over those who don't. Notice I said "may" have an advantage. All bets are off when it comes to earnings season. Sometimes you can get a clue to the direction of the stock and sometimes you wake up to a nasty surprise.
It is always extremely risky to own stock when earnings are released. Many experienced traders use options to participate in the potential movement or protect gains around earnings. Some people just sell a majority of their shares before the earnings come out and then buy back the next day or so. It is all about limiting your risk.