Can you hear that?….That’s the sounds of shrills of Facebook longs seeing their position lose almost a year in appreciation over an earnings miss. Facebook reported that their growth long term was not a sustainable rate, but that didn’t cushion the blow from the investor’s reaction.
Right now I feel analysts are trying to price in the forward P/E for Facebook’s guidance on a slowed growth for the rest of the quarter. I personally saw this as a good buying opportunity because there are no fundamental changes in the long run to the health of the company. I feel investors who can see the priced in premium of the emotional sell-off also see this as a great buying opportunity!
Being the opportunist I am I waited for a wall in price action based off of the price action of the Cambridge sell off my entry range was sub 168$ with a stop at 158 and a sell at 180. At the time of writing this article, my tiny calculated dip wager is looking promising. With an entry point of 166 on average, we are currently up 7-9% in pre-market hours as facebook recovers back to the 180$ range. I’m playing the bargain hunter rally as they buy in I will be selling. If the rally is killed by the Tech bears who still want to panic sell there may be an opportunity for a short squeeze depending on the sentiment.
As I am not Long Facebook this is more of a sideline enjoyment and a small profit from emotional investors. “Buy the fear, sell the greed” is a common saying but remember to have a method and execution as I know dip buyers who entered thinking that 180$ was a “bargain buy” are trying to break even now, but I knew since this miss is something that is leaking into slowed future growth it should have a deeper impact. And 150$ has the most volume weighted shares entered so sub 170$ seemed to be the best Bargain zone with a 2.5 to 1 profit loss ratio.
Be sure to buy the fear when the fear is irrational boys.
I’m Michael Alexander with FaceTank Entrepreneurs, see you guys in the green!