Facebook Update and Notes on Apple

By: Joseph Russo | Tue, Jul 10, 2012
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Facebook Update

Upon its initial IPO on May 18, we provided a technical assessment as to the bearish nature in which the market frowned on Facebook. After opening at $42 and trading as high as $45, we provided a short-term downside price target of $31.00 per share.

On May 22, we reported that indeed Facebook had said hello to $31.00 per share. On June 6, Facebook set a tradable low at $25.52 and has been rallying ever since. With two months of data now behind it, we thought it reasonable to present a brief update.

Rising impulsively in 12-sessions from its $25.52 low on June 6 to a print high of $33.45 on June 22, a 31% gain, Facebook is showing some signs of life. As evidenced by its initial fall from grace as the broad markets were in the midst of a correction, timing indeed is everything.

Facebook

Assuming that Facebook is likely to rise and fall in general tandem with the broader markets, we have tentatively given a minor degree -1/a- label to the $25.52 pivot low. Similarly, we have tagged the $33.45 high as an -a- wave at minute degree, which suggests a down/up sequence may lie ahead over the near term.

If this observation proves correct, we suspect that Facebook has more downside ahead in order to consolidate its recent 31% gains. The stock closed today's session spot on the dashed rising speedline of support traversing upward across the whole of the chart. A decisive breach of this trendline will likely take Facebook down into our downside target window, which opens at $29.84 on the high end, and closes at $28.00 at the low end.

Actionable considerations going forward:


Notes on Apple:

Before we share our current notes on trade in Apple, we first wish to share a bullish trade trigger that elected from a breakout above 573, which went on to return over 8% in less than two months.

Apple

In the above chart rendered within the May 23 Chart-Cast Pilot, shortly following the 528.66 pivot low, we have highlighted in yellow, the pending 46-pt buy trigger arrowed in advance of its election. As an aside, the chart from May also boasts a 16-pt downside price captured at 540, and profits of 3.44% booked upon reversing long at 566.78 via a non-discretionary short-term trading strategy, which had been short from 587 on April 30.

That was then - This is now:

BAM!- Today, upon Apple briefly trading north of 619 before dropping more than $8 dollars a share, we highlight the capture of the 46-pt trigger we had cited back in May. As an aside, our non-discretionary trading strategy maintains a profitable long position taken from 580.39 on June 29.

Actionable considerations going forward:

Against the prevailing pivot high of 619.87, a breach beneath the rising red trendline trajectory cites prospects for a $14 dollar decline in share value.

In contrast, so long as the pivot low at 601.58 holds, a breakout above the rising green trendline cites prospects for a $14 dollar advance in share value.

Apple

In the spirit and wisdom of Adam Smith, it will generally be more advantageous for traders and investors to acquire from the professional analyst the charts he has occasion for than attempting to render such work for himself.

 


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Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

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, ...

  • 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).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • 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."

  • 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.

  • 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.

  • 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.

  • 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.

  • 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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