Let's take a look at facebook from the beginning of the current uptrend.
Everything started with a fry pan bottom, labeled in red. The confirmation signal was that huge gap up, an excellent buying opportunity. That gap showed us that the investor's sentiment on facebook changed, bulls coming to power.
Then after a few months of upward movement and a correction ( the left shoulder) a divergence was taking shape. After an exhaustion gap we had a doji, followed by an engulfing pattern which was the signal for a stronger correction.
By mid november, we had a beautiful H&S pattern with a broken neckline. Allthough price was declining, histrogram was rising, a signal for caution, not reverseal. The day after the neckline was broken, we can see a piercing line pattern. This was the turning point of the market, the place where the smart money bought the stock (not me, unfortunately i missed the boat).
Technical analysis can give us a sight of the future. Yesterday's volume confuses me, i do not know what to think of it, probably many bulls unloaded because it didn't go over resistence, but the price maintained at a high level, so we had buyers too. Today, we have relatively strong volume, with a strong break over resistance, histogram rising, weekly chart looking bullish so an uptrend is probable.
If tommorow we won't have an ugly gap down, i am going to enter long with a stop under the previous high ( red line) and under the hesisation candles.
Everything started with a fry pan bottom, labeled in red. The confirmation signal was that huge gap up, an excellent buying opportunity. That gap showed us that the investor's sentiment on facebook changed, bulls coming to power.
Then after a few months of upward movement and a correction ( the left shoulder) a divergence was taking shape. After an exhaustion gap we had a doji, followed by an engulfing pattern which was the signal for a stronger correction.
By mid november, we had a beautiful H&S pattern with a broken neckline. Allthough price was declining, histrogram was rising, a signal for caution, not reverseal. The day after the neckline was broken, we can see a piercing line pattern. This was the turning point of the market, the place where the smart money bought the stock (not me, unfortunately i missed the boat).
Technical analysis can give us a sight of the future. Yesterday's volume confuses me, i do not know what to think of it, probably many bulls unloaded because it didn't go over resistence, but the price maintained at a high level, so we had buyers too. Today, we have relatively strong volume, with a strong break over resistance, histogram rising, weekly chart looking bullish so an uptrend is probable.
If tommorow we won't have an ugly gap down, i am going to enter long with a stop under the previous high ( red line) and under the hesisation candles.