If Facebook reaches $184 prior to next week's earnings report, I will be opening a short position. While this wouldn't be a text book head and shoulders, it would fit much of that technical profile. Insiders have been selling off large numbers of shares recently. Would place stop near $190 mark as a break above would largely invalidate the idea. In the event that this trade breaks my way, I will do a partial cover at $155.
Where did you see insiders selling off? I have looked for SEC filings and haven't found really any insider selling. I have seen Hedge funds buying and another selling out, but that was about it. I assume if one of the employees that left the company sold their shares that's one thing. Can you tell me where you found that info, it would be very helpful since Twitter, Snap totally beat earnings. I don't want to open a long call spread before earnings if I find it too risky. One would assume that the scandals and privacy issues are already baked into the stock. Thank you for any help you can provide.
DefineRisk
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@zaz_dr, Here are a couple links showing executive selling. This isn't by any means atypical or cause for concern, simply something of note that helps shape a counter trend idea. And you are likely correct that the scandals are baked into price at this point, however in my eyes there is potential for longer term slowed momentum due to the fact that Facebook's real business is data mining, and now everyone knows it. Anecdotally, I am seeing a trend among my circle, of people leaving facebook. Whether it be due to privacy concerns or concerns that FB is becoming a net negative in regards to societal impact. That said, they could end up with an earnings beat that excites everyone and their stock could go soaring. Part of the risk in making a directional bet counter to the trend.
gurufocus.com/news/857728/facebook-inc-fb-cob-and-ceo-mark-zuckerberg-sold-58-million-of-shares nasdaq.com/symbol/fb/insider-trades
sokkary858
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@Definemurder, Hi, what about now after earning report and price up ?
DefineRisk
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@Sokkary, Idea is invalidated. So taking the loss on this one. I am speechless as to how FB is maintaining this user growth. It doesn't make any sense to me. So on to the next trade.
In33muney
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Thanks for the info, I had call spreads that night and new that the sentiment towards FB was already low and probably priced in. I was looking for any reason to close out my positions before earnings. Glad I didn't thanks for the info!