4 Trade Ideas for Facebook: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Facebook, $FB, rose to a peak in April and then pulled back to the 200 day SMA. It bounced from there and continued to a higher high in July. But since then it has had a tough time, pulling back to the 200 day SMA again. But that touch reversed the price action again and it is rising back up and making higher highs, rounding out of the pullback.

The RSI is rising into the bullish zone with the MACD climbing and positive. The Bollinger Bands® have also turned to the upside. There is resistance at 200 and 206.75 then 212 and 218.60. Support lower comes at 195.40 and 191 then 189. Short interest is low at 1.1%. The company is expected to report earnings next on January 28th.

The December options chain shows biggest open interest at the 190 strike on the put side, but size from 195 down to below 175. On the call side it is large from 190 to 210. In the January chain it is spread from 150 to 200 on the put side and focused at 200 on the call side. February open interest is still building but biggest at the 185 put strike and much larger at 195 and 200 on the call side. This is the first chain that covers the next earnings report.

Facebook, Ticker: $FB

Trade Idea 1: Buy the stock on a move over 200 with a stop at 195.

Trade Idea 2: Buy the stock on a move over 200 and add a December 197.50/190 Put Spread ($2.50) while selling the January 215 Calls ($2.00).

Trade Idea 3: Buy the December/February 210 Call Calendar ($5.45) and sell the December 187.50 Put ($1.45).

Trade Idea 4: Buy the February 180/200/215 Call Spread Risk Reversal ($2.10).

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After reviewing over 1,000 charts, I have found some good setups for the week.  These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which heading into the shortened Thanksgiving week gave equity investors a lot to be thankful for with stock prices sticking near all-time highs.

Elsewhere look for Gold to continue the pullback while Crude Oil rises in consolidation. The US Dollar Index looks to continue to drift higher while US Treasuries bounce in their downtrend. The Shanghai Composite is pulling back in consolidation while Emerging Markets mark time moving sideways at resistance.

Volatility remains very low keeping the bias to the upside for the equity index ETF’s SPY, IWM and QQQ. The SPY and QQQ both sit above the 20 day SMA’s and look strong after a digestive week while the IWM continues to churn in a wide consolidation. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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