Friday 14 December 2012

FB - flat top..set to drop?

Facebook (FB) declined by a significant 5% today, to close the week @ $26.83. Is the latest little round of hysteria over with? It will only take one further daily decline to confirm the recent two trading weeks have become a strong wall of resistance.


FB, daily


Summary

The over hyped and grossly over-valued FB saw one of the biggest declines since late September. The break into the 27s certainly opened up the big $30, but..FB just couldn't make it. Despite ten days of trying, it looks like FB is exhausted, and is now beginning a down cycle.


Targets?

First target is the 50 day MA, a touch under $23. If I am correct about the indexes - with sp' low 1200s in early January, then FB in the 22/20 zone seems very viable.

Only with a break above the recent 27/28 highs, could I again consider FB breaking into the 30s. After today's decline, that just doesn't look likely this side of Christmas.

Fair value remains $4, but as things are in this crazy market, that now seems unlikely until the tail end of 2013.

I remain short FB, and seeking an exit around $22/20 in January.