I think that's way too pessimistic an outlook. There are some possible buying opportunities coming up but I don't see a company that has such a robust earnings stream tanking more than 26%. Here's a link to a money management strategy that will pay off when it does hit bottom tradingview.com/chart/FB/J4QOobrZ-FB-Money-Management-Strategy/. I might add one more buy point at 148, but I don't think it will go that low.
Septimus
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Here's the strategy explained.
With the market taking a downturn as a whole, it creates some buying opportunities for some very profitable companies like Facebook -1.07% .
Strategy: Take whatever amount you want to invest in FB -1.07% and divide it into 4 equal parts.
1. Buy at each level I've indicated.
2. Sell at target price I've indicated.
I believe FB -1.07% will go down in the short term and then eventually retest 193.09. I don't know exactly how far it will go down, but I believe it will bounce off one of the 4 levels I've indicated, and I don't think it will correct any lower than the bottom buy target (156.55). There is strong support there, and the business is very strong. If all buy targets are hit then you'll have an average cost basis of 167.26 giving you a 15.36% gain when it returns to 193.09. If it goes up before it hits all the targets, then you'll make less money then you would have if you'd been able to get the maximum exposure you'd allocated, but you'll still make money and that's something never to complain about. This strategy protects you from buying too high while allowing you to get some exposure to this very profitable company.
I am a swing trader and trade what the market gives me. No bias one way or other.
Septimus
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@Will Wong, I think shorting this all the way to 156.55 might be an excellent strategy with proper stops put into place. It's certainly another way to play it. I'm just wondering if trying to get to 123.97 is a little too ambitious or overly negative (depending on your trade). Why do you think it will go that low? FB has had a lot of bad press lately, and the market has been selling off but is that enough to send it 36.5% off it's high? The only time it's ever dropped anywhere near that large a percentage was shortly after it's IPO. That was before it had figured out how to monetize its platform.
Can you explain why you think it will get down to 123.97? I'm not saying you're wrong, I just want to know if there is a compelling idea to lower my "buy" levels.
Those are just the normal fibo retracement targets. I don’t necessarily believe it will get that low. Just possible targets. However, in a market wide post wave 5 sell off, anything is possible.