Here’s your trade on Facebook (FB). (February 11, 2013)
FB
I’m Dan Fitzpatrick at Stock and Option Market Mentor on Monday, February 11th. Nice to be back, I’ve been gone for a week learning how to shoot stuff really fast over and in Vegas. Anyway, look Facebook ( $FB Facebook Inc ); what are you going to do with this the company? It fell down after earnings and promptly rebounded, that was actually a buy signal really. Big volume, but the stock did trade up on the day, relative to the open of course. Now however, the stocks down at the 50-day moving average, looked like maybe that was a nice bounce point, now not so much, and as I record this video the stocks down a little bit more after hours, so this is a really easy analysis. Stay away from Facebook ( $FB Facebook Inc ), that’s really what I’m saying. I don’t know that you want to short it because guess what? Sooner or later and I don’t know what the timeline is as far as the time requirements for trading, but this stock is ultimately going to be added to the S&P 500, you can bet on that. In fact if you happen to know, I’m sure I could look it up but I’ve got too much other stuff to do; if you happen to know how many days or weeks or years or whatever a stock needs to be trading before Standard & Poor’s will add it to their index, let me know, and if it’s totally purely discretionary, hey, they can do it whatever they want, well let me know that too, okay? But the bottom line is, this is a stock that I would not want to be short just for that reason alone, because if that happened this stock could be up big time in no time. The same thing happened to Google ( $GOOG Google Inc ) way back when they got added. So be careful about shorting this stock, at least have it hedged by holding some out of the money calls or something which will cap your losses, you know will define your losses, we talk about that kind of stuff over in Option Market Mentor. What I would suggest doing is just standing aside, let this stock do what it’s going to do, it’s just not a stock that you want to be trading right now. So anyway that’s it, this is a don’t buy video as opposed to buy. So I will have another one for you tomorrow. Members my Strategy Session is about 33 minutes long, it’s a little longer than usual because I’ve got a lot of stocks to go over and I think some really good opportunities. I’ll see you over there. Free Chart