Select Page
Weekly Three Extreme Trades / Extreme Trade: Facebook (FB) Excessively Oversold

Extreme Trade: Facebook (FB) Excessively Oversold

April 10, 2018

By now, we’re all familiar with Facebook (FB).

We’re all also aware the stock took a massive beating, gaping rom $185 to less than $150 on privacy concerns.  But we strongly believe a great deal of fear has already been priced into the stock.  And we strongly believe the stock is technically over-extended to the downside.

In fact, if we look at the chart, we can clearly see the stock is at its lower Bollinger Band with oversold RSI, MACD and Williams’ %R.

We don’t see a great deal of further downside here based on baked in fear.  What we’d like to see is a potential bearish gap refill around $185, near-term.

To profit from that, we can take two positions.  One, we can buy the FB stock at market prices.  And, or two, we can buy to open the FB May 18, 2018 165 calls at market.

We’d like to see at least a double on the options, near-term.