Facebook (FB) Technical Analysis 31 July 2018 - Planning a Long Trade
After the huge loss, it's time to consider what to do with FB. Should we follow the massive down-movement with a short position? Should we take advantage of a cheap price to buy?
My idea is that long positions offer a better opportunity in terms of risk to reward ratio.
The orange line represents the level where usually buyers found convenient to take their profits, so we can place a take profit around $220.
The red line represents last significant low. I want to place my stop loss right below that level, so $145.
With a market order at this price, you would get a risk to reward ratio of 1:1.7.
My suggestion is to wait for a price of $170 to get an RR of 1:2.
Indicators have a slight preference for short positions, but I must say that usually indicators are not so helpful in these situations.
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