Here’s how I’m trading Facebook ($FB) – October 4, 2021


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I want to look at Facebook ( NASDAQ: FB ) today and here’s why, I have seen a lot of posts today, some in our trading forum and then some just on Twitter, whatever, about this. How it’s a good short, and I guess Cramer was pining that this time is different, that advertisers are going to flee Facebook ( NASDAQ: FB ).

What am I going to do with this stock? Oh, I want to short the snot out of this because their power went out, them and Instagram and whatever other companies they own. All of that stuff is just horrible, horrible stuff. And then, as it turns out, a bunch of their inflammation, I think it’s like 1.5 billion users, your information is for sale on a hacking website. So there are all kinds of crap that is going wrong with this company. So I don’t think it’s a good short, though.

If you are buying it, (forget about this stuff, I don’t know why TC2000 isn’t able to manage these after-market ticks) as I look at this stock there is no way that I would be interested in buying it just because of the way that I trade. However, I will say, gun to head, and thank you for nobody doing that, I would be a buyer of this before I would sell it because the stock has already taken a dump, it’s in the porta-potty in a huge way.

It is very close to the 200-day moving average and that is an obvious bounce point. It doesn’t hit the 200-day that often, and when it has in the past it has turned out to be an excellent buying opportunity. Yes, I get it, yes, back here in 2020 it didn’t. Well, guys, everything did that, everything did that. The same thing here, but with respect to the general trend anytime this stock has hit the 200, it’s a buy.

As I look at this stock now it is not something that I would buy, this notwithstanding, but I will tell you why. Because the faster down stocks go, remember, everybody that sells a stock, that share is bought by somebody else. And if the stock keeps falling lower and lower, that somebody else who bought the stock is losing money. And so because of that, when you see something decline so fast and so hard, this leaves, in its wake at higher prices, traders who are really unhappy and they will want to be selling if the stock can actually come back and help them get their money back. And so, that’s a situation where, as I say, there’s a lot of pain in the chart.

Because of that, I would expect any rebound to actually be kind of mild. I could be wrong, I was wrong in a similar fashion. I will just tell you, I was wrong on Roku ( NASDAQ: ROKU ), kind of a different situation but those that are members will know this. We had a nice trade on Roku ( NASDAQ: ROKU ) and then the stock fell down to here. I was kind of looking at the same type of situation and I said, “You know, I don’t think that the stock is going to rebound that fast. I think it’s going to need some time,” and that kind of turned out to be wrong. Ultimately, it was right but that’s a different analysis. I was wrong in looking and saying this was not going to snap back quickly.

Now, with Facebook ( NASDAQ: FB ), I would give the same analysis. But here’s what you need to know, it’s not like somebody died in an auto accident. All of the stuff that is happening right now is fixable, it is totally fixable. And even though I think that Zuck and Sandberg are scumbags, nobody really cares what I think with respect to those two people. They are both billionaires, I’m not. You don’t care what I think, yes, I am just editorializing, but they are going to fix this issue.

Remember when they weren’t able to monetize Facebook ( NASDAQ: FB ) on the mobile platform? I thought that was kind of the end of it for them too. I am not a visionary, I’m a “nowanary”, that’s all I look for. And right now, as I see this, I see this stock potentially coming up to rebound, kind of like the S&P ( NYSEARCA: SPY ) did back here. This is what I can envision for Facebook ( NASDAQ: FB ), and then ultimately this comes back down. I could actually envision Facebook ( NASDAQ: FB ) doing the same thing.

What I would really look for is, this stock to rebound and rebound fiercely and violently. And then IF not when, I’m not Dennis Gartman, I am not a prognosticator. I don’t know what he is but I am not that. What I would expect is for this stock to come up here. And then what I will be watching for is this, I will be watching to see if this stock fails. If it fails at or right around the 50-day moving average.

This would be one of those instances where, if you look at the stock it is just bouncing up and down, up and down, up and down, but always kind of on the same railroad tracks. This is where the train goes off the track, it’s trying to get back on and it is not working that well. So where I would want to be shorting this stock is, if it does this I am going to want to short it right here. Like on the first down day and then keep a buy stop just above here, like this. That is where I would want to short the stock.

If you are looking at shorting this stock now, that’s just madness. The stock has fallen all of the way down here. It is not just going to keep going down. They will gt past this thing, they always do. And then yes, I will say it, then you are going to get back on Facebook ( NASDAQ: FB ) because you have to, you need the rush, you need the adrenaline, you need the endorphins that you get from somebody posting “Likes” when you post your latest selfie of the meal that you ate, the dessert that you are having.

You know the drill, you do it. You get all of your news from there. You are not going to get off of there just because of these current problems. And you don’t really care what Cramer says about advertising fleeing. You are going to get back in there because you need it. It is what validates you as a person, certainly as a millennial or whatever you call yourselves these days. Everybody needs Facebook ( NASDAQ: FB ), if for no other reason than to get all of your unbiased news.

So, don’t give up on Facebook ( NASDAQ: FB ). Don’t think it’s Faceplant, it’s not. I have told you my trading strategy, I wouldn’t buy this here. I wouldn’t sell it. I would actually wait for the stock to come back up and then look to see IF it might be available for a short or at the very least a bear call spread.

Maybe we will put some trades on Option Market Mentor, an Iron Condor, or something. Or wait for the stock to rebound at the 2 and then put on a bull put spread, selling the 3 hundies, buying the in the 290.00’s, or the 280.00’s, something like that. So there are a lot of ways that you can trade this but just to go flat-out short this stock, I would give you a thumbs down on that. I would dislike you and possibly even unfollow you.

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