I mentioned on Sunday that Facebook looked like a potential short. What we are looking for is a bounce off of the lower band of the rising uptrend channel. One simple question will then need be asked. Will we take out recent highs at $54.83 or do we put in a lower high?

We booked profits on Facebook with a 109% gain and remain bulls longer term but the diverging  indicators vs.  price action imply that we will see continued weakness. Support levels are at the $49.50 level and the 50 day moving average. Earnings will be announced soon. Given this event I any directional play we make will be through the use of options until after earnings.