"Facebook Can't Go Lower" Part 3Back in February Facebook/Meta NASDAQ:FB dropped over -20% on earnings. This was crazy for such a big profile, mega-cap company and many investors though (and said) "Facebook can't possibly go lower" and used this justification to buy right on the drop. From a technical standpoint that drop blew past support and with so many people saying "Facebook can't go lower" my trader senses told me one thing... it WILL go lower. That is why I made that line into a meme at the time.
Now, after many new lows and 68 days of trading after the dump a technical setup has formed that I actually like. I don't know the future but at this point you have a defined bullish trend of buying to key off that has pulled back to a 50% Retracement. From this price action a trader can size their position and risk accordingly. This is something that was NOT possible if someone just bought on the dump alone.
It was entirely possible that Facebook could have gone lower and lower. Fortunately and unfortunately it did not. Fortunately, as many investors are surely glad. Unfortunately, because returning to breakeven and then profit fails to leave the impression on those that jumped the trade without patience.
The Lesson here is simple: Wait for price action to provide a setup. Even if it takes months.
