Planning Levels for Buying Facebook FB at Support

Jul 30, 2015: 10:45 AM CST

Is this the spot to buy Facebook (FB) shares?

Let’s update our daily chart levels, note a key confluence, and plan trades from the current swing.

Facebook (FB) shares are trending higher as evidenced by price (higher highs and higher lows) and a rising moving average slope.

Following the trend, we tend to look for retracements (like flags) or breakouts to buy shares into a rising trend.

Also, note that volume – and momentum – are confirming the trend (they are making new highs with price).

The question now becomes:

Is THIS the spot to buy shares at a support level … or might this retracement take price beneath support?

A simple glance at the chart above shows the rising 20 day EMA at $92.65 per share and an initial intraday bounce up off this level during a volatile morning

I’m also highlighting two specific price levels (blue lines):

  • The Open on July 17 ($92.55)
  • The High/Close BEFORE the Gap ($90.81)

There’s something else special about the $91.00 per share level as shown below:

I drew a Fibonacci Confluence Grid from three prior swing lows – all to the July high.

The Red Grid shows the immediate swing with yet another overlap at the $92.40 level.

More important is the $90.81 confluence of the Red and Green Fibonacci Grids.

What’s the play here?

Ultimately if buyers step in here at the $92.00 level (today’s spike reversal), then shares could trade higher on a journey toward the $100.00 per share level.

That would be the bullish pro-trend continuation outcome, calling for a buy and rally away from $92.00.

Under this scenario, price should not break under the triple support confluence at the $91.00 per share level.

If buying shares, look to place an initial stop-loss under the $91.00 level.

We can’t assume everything will work out perfectly, so avoid buying (or consider aggressive short-selling) in the alternate thesis event shares do shatter under the $91.00 confluence.

For today and beyond, focus on the $92.00 per share pivot – $91.00 if under $92.00 – and the potential for a buy-swing rally higher to continue the strong uptrend in price.

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Corey Rosenbloom, CMT
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2 Responses to “Planning Levels for Buying Facebook FB at Support”

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