While NYX has rallied hard in 2013, this year has been a bloodbath for Facebook (FB). The 8% drop in shares since January doesn't look horrific on its surface, but when you factor in the 15% rally in the rest of the market over the same period, the underperformance is cringe-worthy. Well, it finally looks like shareholders could be due for a reprieve.
FB is another name that's forming an inverse head and shoulders pattern. The key difference is that FB's pattern is a little bit more textbook since it comes in at the bottom of the stock's recent price range, rather than the top. FB is a little less far along than NYX; the buy signal comes on a move above the neckline at $24.60.Momentumadds some extra confidence to this trade. 14-day RSI reversed its downtrend at the start of this month -- a new uptrend in this momentum gauge is a bullish signal, but it's not a buy signal just yet. That doesn't happen until the neckline gets taken out. When it does, I'd suggest keeping a stop under the right shoulder. To see this week's trades in action, check out this week's Must-See Charts portfolio on Stockpickr.-- Written by Jonas Elmerraji in Baltimore.
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