NEW YORK (TheStreet) -- Good day traders!
1. First, let's look at Facebook, the social media giant that has changed how more than 1.2 billion people spend their day.
Facebook traded positive on Tuesday, closing up 4.6% to $65.77 per share.
- Tuesday's range: $63.50 - $65.82
- 52-week range: $23.26 - $72.59
- Tuesday's volume: 68,490,394
- 3-month average volume: 66,285,200
Go check your news feed, update your status, take a picture of what you are having for lunch, then take a selfie of you buying shares of Facebook.Today the stock is a top pick.
Facebook has been trading sideways since March, after a short downtrend. Even after reporting positive earnings, the stock still faltered and didn't really go anywhere. There have been trading opportunities in Facebook during this sideways action, but I prefer to get it on breakouts.
Yesterday, price action moved above the sideways levels. Now the stock is poised to break out.
The sideways channel lets us know that investors aren't going to let the shares trade any lower. The chart formed a triple bottom, testing the lows, and formed many bullish candles along the way. There was a bullish engulfing signal, followed by more bullish engulfing signals. Then there was consolidation at the top of the trend channel. Yesterday was a doji gap up -- the trader's best friend. (A doji chart has a stock price that opens and closes in almost the same spot, but it may be wide-ranging in price over the course of the day.)
After an almost 5% upside day, shares will likely consolidate a bit. The next overhead resistance is at $67, $69.71 then again at the 52-week high of $72.59. I would set a stop at about $61.50, just below the recent consolidation levels. I'd like to get an inside day entry, meaning within yesterday's price action range, so I can get it at a cheaper price.
I would target the 52-week high to start, and stay long until you see a sell signal that the stock is turning around. If you are a t-line trader, get solid confirmation before exiting the trade.
Next up: Vivus and Wageworks.