timwest
Short

Facebook FB technical sell signal

NASDAQ:FB   FACEBOOK INC
474 3 1
Technical Signal Only: No fundamental catalyst other than extremely high valuation of $185 billion for a company doing $7.8 billion in revenues with $1.5 billion on the bottom line.

The lack of upside movement after the $19 billion WhatsApp acquisition is potentially another sign that this is ripe for a correction.

I placed all of the downside movements on the chart of the previous times FB             had the current signal, which is a 21-day Commodity Channel Indexcross-under the 100 reading. (Said another way: A 1-standard deviation movement away from the 21-day moving average , then a drop back under that 1 standard-deviation level).

From my Tim's "TIME AT A PRICE" methodology, the rally time for FB             is also complete, so there is a chance that there are very few buyers left supporting the stock here as the time of the rally equals the time of the accumulation.

I think a move to $65 would be ideal for this setup, but that is just a guess. The best thing to do is to watch it closely and move your stop down as it falls.

Tim

7:47PM EST 2/27/14
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nihal.bhat.7
2 years ago
yeah market cap looks even more bloated if u add the restricted stock.
wary of short on these irrational exuberance MOMO stocks, but theres only so much the banks can wring out of these.
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timwest PRO
2 years ago
Working very nicely so far without any pain. The bloated valuations of the social networks has to be one of the biggest bubbles of all time. But that's for another discussion. For comparison: With 171 billion in cash, you could buy Coca-Cola and have $4 billion left in the bank. Or you could buy Facebook. Maybe the message is that Coca-Cola could create a website for coke drinkers and all the related drinks they sell, it would be a bigger network than facebook. It makes you think that maybe Coke could sell ads on its soda cans :-)
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timwest PRO
2 years ago
Covered today under $64.
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