Face Book (FB) has been the most hated IPO I ever recall in my trading career. I have been following this stock in the chat room for last three days as it broke 30 level. I knew the initial price was 28 before they pump the price and screwed everyone. Since its an IPO and no previous price level or MA’s to support a bounce, I used 28 area as a price a pivot.
Yesterday it did manage to close over 28 but the lack participation on that bounce had me convinced not to take the trade . Today is also the last day of the month and to me every firm that owned FB would not want to show their clients that they are holding the stock. It’s basically a mind game , I wanted every traders that took FB trades last few days to become disgusted/frustrated to a point that there are no sellers left. If that condition is met, I will take the trade otherwise pass.
Today it bounced at open only to disgust everyone once it broke yesterdays low below 28 at 27.86. Went down almost $1 to 26.83. By now pretty much everyone gave up. I saw twit about people wanting to buy it at 22 even 15.I even saw few of friend threw in the towel and utterly repulsed by it. I knew time has come for me to try the trade. See the chart below for setup:
1: First try over 20 ema 27.29, with low of the day stop . No go initially.
2: Stock keep on making higher lows.
3: Long with size at 27.11.Notice how we also have 20/50 MA crossover. Perfect storm!
4: Sold 1/2 at that magic 28 number
Swinging rest with target 31.30 area with stop below 28.