Technical Chart Analysis: Facebook’s Version of The Hangover

If you’re day trading Facebook (NASDAQ:FB), first you’re about as crazy as a member of the crew in the movie The Hangover. This stock has absolutely no historical trading activity to provide a strong rationale behind levels of support or resistance.

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And when that’s the case, fundamental valuation should play a larger role. But wait: Facebook’s valuation is so absurd based on the current fundamentals, there’s no rationale anchor points on which masses of investors can agree.

So, if you are attempting to make fast money from shares of FB, here’s everything you need to know at the moment:

$38 is the HUGE line in the sand. Recapturing that would make things interesting. However, since yesterday the stock literally crashed into no-man’s land, we got a new line in the sand at $32.95. Hold on. When we woke up this morning, we had another mini-crash of about 4%. That means we’re dipping into no-man’s land again.

However, while writing this article the stock has created a textbook set of higher highs and lower lows (5 minute bars) in an attempt to retest yesterday’s lows. This area of battle will be extremely important. If bulls can hold some ground, the stock can return to yesterday’s range. If not, this morning’s lows will be the new floor to test before we have another bout of price discovery in the void.

Good luck!

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