Updated: Sep 18, 2019
UPDATED - August 13, 2019
BotTrigger Trade Alert: $FB added to the December 20th, 2019 $180 / $200 vertical call spread @ $10.00. With a filled limit order @ $7.00 & today's entry @ $10.00 that puts us @ cost basis of $8.50 which represents a 135% gain opportunity so long as share price closes @ $200 or higher upon expiration.
Please recall our alert on June 17 when we outlined there were 2 main gaps we wanted to see FB fill. We got 1 of those 2 gaps filled which was around the low $180's. The other gap is a around the $178 but we see plenty of times over where strong stocks with heavy bids don't necessarily fill those gaps. It's even a healthier indication when they barely fill the entire gap zone. That last gap zone is rather inconsequential. The bigger take away is that FB has now found support at this annual support line all within a much larger cup & handle formation. FB has retested the breakout of that CUP formation now twice. So picture it like 2 "handles" within that larger "cup." Although we're modeling for max gain to occur merely if FB is @ $200 or greater than upon Dec expiration, you can bet that the $220 area will act much like a magnet on it's retest to the highs, and once that resistance zone is taken out, FB will most assuredly contend with march upwards to the $300 sometime mid to late 2020. Until then let's take it one step @ a time. $200 plus within the strongest earnings quarter of the year for this advertising / data giant is very much within reach.
Original Post - June 17, 2019
BotTrigger Trade Alert: $FB limit order (GTC) created to buy the December 20th, 2019 $180 / $200 vertical call spread @ $7.00.
"It was never my thinking that made the big money for me, it always was sitting tight." Jesse Livermore.
MAX GAIN is $20 for a 185% gain if share price is @ $200 or > than upon expiration.
BREAKEVEN is share price @ $187 &
MAX LOSS occurs if @ $180 or less than upon expiration.
We want to get positions ready for the biggest earnings period which occurs in the last quarter of the year for this advertising giant. I suspect that the crypto FB buzz will reach a classic "sell the news" cycle once tomorrow's June 18th announcement is unveiled when FB will release it's white paper explaining its cryptocurrency codenamed Libra. https://techcrunch.com/2019/06/06/facebook-libra-launch/
That's a great tailwind to the latest momentum, and although it's all together possible that FB could keep running from here, we're going to bet that these 2 gap-fill areas around the low $180s to high $170s area will get filled. Right now the value of this spread is currently trading around $10.00 which represents a 2X gain at the current pricing. Not bad... but I'm willing to wait for the next pullback OR if we get a clear-cut & authoritative breakout above $200 then we will reexamine the trade setup & model accordingly. Until then we will wait.
Some of the greatest pearls shared by Jesse Livermore:
“Money is made by sitting, not trading.”
“The desire for constant action irrespective of underlying conditions is responsible for many losses in Wall Street even among the professionals, who feel that they must take home some money everyday, as though they were working for regular wages.”
“Buy right, sit tight.”
“Nobody can catch all the fluctuations.”
“There is a time for all things, but I didn’t know it. And that is precisely what beats so many men in Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. Not many can always have adequate reasons for buying and selling stocks daily – or sufficient knowledge to make his play an intelligent play.”
“It takes time to make money.”
“Don’t give me timing, give me time.”