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Joshua Brown

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Curated by Joshua Brown, The Reformed Broker

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Why I'm Stalking Facebook

Posted on 12/03/12 - 02:16 PM EST

To update this blog post about Facebook's sudden resurgence, you can see on the daily chart below how the stock not only became overbought, but stayed so. After a six-month IPO sell-off and subsequent base, the chart is clearly signaling accumulation (buyers of size layering in aggressively) in its volume pattern to accompany the recent base breakout.

When you see a stock that fights hard to avoid an initial steep price correction, it tends to be wildly bullish for the intermediate-term timeframe as it denotes strong and persistent underlying demand for shares. Here, Facebook is riding along its upper daily chart Bollinger Band in lieu of a correction.

Given the gap-up this morning, I would not buy Facebook right here, right now, but you can be sure I am stalking any consolidation for a swing long entry point.

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THE BLOG: http://ibankcoin.com/chessnwine/2012/12/03/wall-street-takes-a-second-look-at-facebook/

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