Swing Trading Facebook

http://profitabletradingtips.com/profitable-trading-
tips/swing-trading-facebook
It may be possible to make money by
swing trading Facebook stock.

Three years ago we wrote about
trading the Facebook IPO a year in
advance of the company going
public. We noted that…

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The fundamentals of Facebook depend
upon its rapid growth. As the IPO
date approaches next year technical
analysis skills will be of paramount
importance in reading market
sentiment just before and after the
IPO date.

In trading the Facebook IPO traders
may see the same sort of first day
jump in stock price that happened
with LinkedIn. Getting in early and
riding the first burst of enthusiasm
can be rewarding, provided that
Facebook follows the model set by
LinkedIn.

If the stock does rise rapidly it could
correct after the initial rise at which
time short selling could be profitable.

It turns out that when Facebook went
public in May of 2012 it was a
Facebook Flop!

The IPO was offered at $38.00. The
stock opened promisingly at $42 a
share and promptly fell into the $38
range. After buying by the investment
bankers who ran the IPO, the stock
rose back as high as $41.68 before
eventually ending the trading day at
$38.27.

Facebook stock fell to the $18 a share
range by August of 2012 and
languished in the $20 a share range
until mid-2013 before starting to go
up.

Although Facebook has not yet proven
to be a good buy and hold
investment, swing trading Facebook
has proven to be profitable.

Ups and Downs Have
Profit Potential

Since July of 2013 Facebook stock has
gone up from $25 a share to $70 a
share today. That is a nice run for
anyone who bought before the run
up.

But with well timed swing trading
Facebook could have generated
more profits for the active trader.

Facebook peaked at $54 a share in
October 2013 and fell to $46 a share
by November. It rose to nearly $70 a
share by March of 2014 and then fell
to $56 a share by April.

After a month in this range the stock
has gone up to $70 a share by July of
2014.

A buy and hold strategy in the last year
would have earned $45 for each $25
invested. Swing trading Facebook
during this time would have earned
$89 or twice as much on well timed
trades.

Whither Facebook?

So, where is this stock going and how
can you make a profit swing trading
Facebook stock?

Facebook will grow its stock price in so
far as it can maintain and grow its
user base and monetize it. This is the
issue we talked about a few years
ago.

With its cash Facebook is buying other
useful companies that enhance its
services and increase its revenue.
While Facebook grows its business,
investors follow quarterly and annual
reports and drive stock prices up and
down based on reported results.

Swing trading Facebook can be
profitable if a trader can anticipate
when the stock will hit the tops and
bottoms of its likely upward trending
stock price.

Swing Trading Facebook

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Swing Trading Facebook