Shares of Facebook Inc
(NASDAQ:FB) are collapsing. Investors who thought the company was invincible were wrong. While earnings
were solid, guidance was definitely on the weak side. Considering every fund, investor and milk man was holding shares, there will be a lot of shocked sellers. If there is one lesson here, it is to never hold a stock that has gone straight up for years. Eventually there will be a blip on the screen and the stock will plummet. Anyways, investors are wondering where it will become a buy again. After analyzing the stock chart, don't touch it until it hits $108.90. Then buy it as a swing trade. Swing trades are shorter term investments that last days to weeks. The stock should have its first significant bounce off that level. I will be looking to buy in the next few days when it reaches $108.90.
Ask me why am I not shorting it now then? Well...
Every trade a smart investor takes is an analysis of risk versus reward. A stock is either a buy, sell (short) or neutral based on risk/reward. In the case of FB
there is no guarantee it will drop to $108 in the timely manner with low enough risk for me to make it worth my while. However, the technical support at $108 is huge, thus the reward is well worth the risk.