Active-Trader - FB Breakout

Welcome back Active Traders.

After many months of sideways action, one of my favorite long-term holds FB (Facebook) finally broke out to a new all-time high this past week.

As you know, I have been a fan of Facebook - the service and the stock - for quite some time. This story is one of those rare confluences when my first hand experience with a product becomes an investment thesis and makes money.  It doesn't happen all that often, but when it does it can be rewarding.

The chart above shows my interpretation of the Fiblines for Facebook as well.  Recall from my prior blog post here that I had an earlier interpretation for FB which showed the entire Fib sequence terminating at the 423% line at about $80.89.  That area served as resistance for some time, but once it was breached, I reconsidered the levels and came up with the new interpretation which is shown above.

Note how the tree line at 80.51 served as resistance for some time but was finally breached decisively to the upside this past week.  From there we can see the a number of levels above with minor snow lines at 83.30 and 85.86 and the next tree line at 89.28.  After that, the next major fire line is overhead at $100.45.  That fire line is only the 161.5% move of the original wave 1 so I think Facebook will eventually go much, much higher.

Some of the price action this past week has to do with news that you will soon be able to send money through Facebook.  As I have said previously, its only a matter of time before we will be making phone calls and video calls through Facebook.  We already use is as a messaging platform and it allows me to stay in touch with people in ways I never could before.  Facebook owns 100% of Instagram which serves a much younger demographic than FB and has yet to monetized.

As for the Fiblines, recall that you can get them for free for Thinkorswim for free, just send an e-mail to fx-mon@yahoogroups.com.

Have a great weekend and week ahead.