Facebook says Hello to $31.00
Following its rather dismal market debut on Friday May 18, 2012, we penned a short article entitled "Market Frowns on Facebook." In it, we stated clearly that if Facebook lost its floor at $38.00 then we could say hello to Facebook at $31.00 dollars per share. On Tuesday May 22, 2012, Facebook met this prescient fate amid a print low of $30.98 dollars per share.
Following Friday's flat faced premier; Monday began trade with a gap down open at $36.53. Setting a low on Monday at $33 even, Facebook traded as high as $35.05 before settling the session at $34.01.
Within the first ten minutes of trade on Tuesday, Facebook hit our downside price target of $31.00 amid a print low of $30.98. From the underwriters failed support of $38, the move down to $31 translates to a decline of 20%. From Tuesdays open, the 24-hour move down to our target measured in excess of 15%.
Going forward, we have drawn a downward trajectory illustrating a speedline of resistance for the shares. If $30.98 marks a temporary floor, we should expect a snap back rally toward the $38 level if our speed line of resistance does not get in the way.
And yes, as for those following "the Pilot" today's updated balance sheet for May still has us all smiling.
Until next time, Trade Better / Invest Smarter
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Author: Joseph Russo
Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology
Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.
Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.
Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...
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In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).
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In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."
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On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."
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On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.
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Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.
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On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.
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For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.
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He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.
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