Facebook (FB) sold off hard on Friday. Did the expiration of the lockup kill the chart, or give us a buying opportunity? (December 14, 2012)
FB
I’m Dan Fitzpatrick at StockMarketMentor.com on Saturday, December 15th, sixteen days away from 2013. I want to look at Facebook ( $FB Facebook Inc ). Look, this has been trading sideways for quite a while. This selling, on Friday, was really because of a lock-up expiration, a lot of new shares came on the market, and I think what was happening was, you know, you’re going to get all these folks who are selling, they want to take their money in 2012 rather than 2013, and pay the lower taxes, because you know all these folks are going to be in the highest tax bracket because of the money that they’re making on the stock. So where does that lead us? Okay, I think ultimately, no matter how far Facebook ( $FB Facebook Inc ) falls, and it could actually start back up on Monday, who knows? But I think when it falls, the lower it falls, the better buying opportunity there is. I’m not a fan, as most know, of the Facebook ( $FB Facebook Inc ) product; I think it’s a little creepy. But there’s like a billion people who disagree with me, and that’s fine, I’m looking at the stock here, not the company. This has come through quite a long base here, there are supposedly a billion accounts, though I don’t think they’re all new accounts, in other words I think there’s some duplicates there, but does it really matter? No, it doesn’t really matter. Bottom line is, they’ve got a lot of users, they’ve got a lot of smart people working there, and they will find a way, I think they are finding a way to monetize this even with the mobile market. So I think the market is starting to anticipate this. What I would suggest doing, I mean if the stock starts breaking out, trading above $28.50, then I think you’ve got to buy the stock, because the only reason it’s trading up that high is if it’s going higher, if it’s completing this base. But if the stock pulls back then let it pull back, and wait for the first up day, wait for the first day where the close is higher than the open, and then use that intraday low as a reference for your stop, and then put your stop just slightly below that level, you know, where ever it is; that way you’re able to buy on the dip without taking excessive risk, in other words you wait for some kind of a bounce, you buy it, you put your stop in and then if the stock reverses further you’re taking a small loss, which last time I checked, is much better than taking a big loss. Anyway, those are my thoughts on Facebook ( $FB Facebook Inc ). Members get over to the Weekend Update; I’ve got a lot of stuff to cover, particularly financials and the second video. Also Option Market Mentor members, I’ve got an update on our trades and little bit of an outlook for next week, so I’ll see you next time. Oh, by the way, one other thing, I almost forgot, but I didn’t forget, I remembered; I’m going to be on Squawk Box on Monday at 11:00 A.M. Eastern, 8:00 Pacific time, so I hope you’ll check that out; I’m talking about Apple ( $AAPL Apple Inc ) and Research In Motion ( $RIMM Research In Motion Limited ). Free Chart