Ratcheting Facebook Stops

I realize there are probably some buy and hold investors who may be reading this, but most of my traders play my setups, and then use a trailing stop for an exit. I have a case for ratcheting up stops for anyone who is currently long Facebook . I like the fact that FB is currently above the 200-day and 50-day simple moving averages. I also like that the 5/13 exponential moving average combo is also in a buy mode with the 5 EMA above the 13 EMA. Now if FB continues to follow the path of least resistance, my first real upside target off the May 12 low comes in at the $340.95 area and then my typical target two comes in at $352.59. Ideally FB continues to move in your favor and heads toward the next upside targets. I think it's also important however, to look at what could stop FB from moving towards those next targets as part of your trade management. There are a couple things that I'm watching right now that could stop the move if only temporarily. First, off the last smaller pullback that we saw in this name (pullback into the May 19 low) we have met two Fibonacci price extensions from that low. One of the things that I always remind my subscribers of is that many moves tend to terminate at extensions of prior swings. This is one reason why I'm suggesting they trail up stops in this name. The other reason is that I have a cluster of Fibonacci time relationships due between May 27-28. Two of the cycles comes from the comparison of two prior rally swings of 11 and 12 trading days with the current rally swing off the last low which is currently 11 trading days. Since swings on the same chart tend to be similar to other swings, I have to watch this as natural resistance to the recent rally. Also when are market is moving directly up into a group of Fibonacci cycles, we have to anticipate a possible reversal of whatever the market is doing into the time window. So I'm still projecting for my upside targets ... but at this point I would want to trail up a stop on longs just in case the timing kicks in. One likely place would be below a prior swing low like below a swing low on the 30-minute chart at $326.76. What I often ask my subscribers is how much are you willing to sit through as far as a pullback to try to stay in for higher targets? Some will want to use a tighter trailing stop and some will want to give it more room. Let's look at a Nasdaq chart next. What I like about this chart is that all the daily moving averages also support higher prices and I do have much higher typical targets noted on the chart. I also have to throw a caution flag up in this index, however, due to Fibonacci time cycles. These cycles are just suggesting that shorter-term oriented traders should also be ratcheting up stops in the indices. Timing won't always kick in for a reversal, but it does often enough so they are worth watching. I'll share where the timing histogram comes from in the program I use below. The program will take the key highs and lows I've selected to run the timing factors and then it spits out this report that actually shows you the cycles and then it plots it on the chart in the form of a histogram. Note that this histogram that shows these calculations using calendar day projections tell us that we have some standout timing for a possible high. Note these dates will tend to be a few days different than my trading day cycles. The first standout bars came in May 28-29. If the timing is going to kick in for a high ... it should between May 27 and early this week. I typically look at the cycles plus or minus a day of the cycles as the window to watch for a potential reversal. So for those who think it's appropriate ... please ratchet up stops on longs. If you don't get stopped out we continue to rally towards targets....no harm no foul ... I'd rather be safe than sorry. I hope everyone had a nice long holiday weekend. If you need help with trigger, please watch this video. If you would like to learn more about my trading methodology, please watch this.

Ratcheting Facebook Stops

I like the fact that FB is currently above the 200-day and 50-day simple moving averages.

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