Saturday, July 18, 2015
It was a great week to be an investor, worries about Greece and a signed Nuclear deal with Iran gave the markets a reason to cheer and cheer they did.
We had spectacular breakouts in AMZN, FB, NFLX and GOOG. Most of these symbols respected the Fib lines nicely.
I had my eye on NFLX post earnings, and was able to trade it due to knowledge of the 161% line. I noted at the time the way price reacted to the line and traded accordingly by selling puts at the 108 strike. As it turns out, it was pretty close to the low of the which was was 107.68 and the 161% line was at 107.75. Close enough for government work as they say.
And therein lies the answer to a common question about Fiblines. How do you know which lines the stock will respect in advance? The answer is,you don't, but the price action itself will often give you the clues you need to take advantage.
Facebook also rocked out to new all-time highs and the next target is the 161% line at about 100.49 where I expect it to make it too this coming week after earnings.
Overall, keep in mind that the 161% line is relatively low in the fib sequence and long term, I expect Facebook shares to go much, much higher.
Have a great week ahead.
Posted by C. Smith at 2:11 PM
Sunday, July 5, 2015
Readers of my blog know I have been a fan of Facebook for some time. After many months of sideways action, Facebook finally broke out to new all times highs in the past few weeks. Recall from my prior post FB Breakout back in March of 2015, I recalculated Fib Levels and came up with what you see on the left.
As the move ran its course, I realized that prices topped out right at the green line at the 89.28 level - or within 12 cents of the level I calculated back in March! Well I took that as a hint and closed half of my position in the lower 88's and at a nice profit. Then as the stock came in and found resistance at the lower snow line about 86 I bought back my Facebook shares sold about 2 points higher.
Needless to say, I am finding the fib levels to be a big help trading around a core position in Facebook.
In the past few days, I have been hard at work updating fib levels for several key stocks that have exceeded the 423% level which is the end of the voodoo sequence. These updates include key stocks suck as AMZN, NFLX, NTES, REGN and TSLA.
Unlike prior posts, I'm not going to reveal the levels here, but I will save the details for those who get the indicator free from my Yahoo Group. You can get my Fiblines indicator for Thinkorswim for free, just send an e-mail to firstname.lastname@example.org.
Good luck and good trading.
Posted by C. Smith at 2:02 PM