Do we “Like Facebook”? I wrote a piece on November 4th called “Short Facebook?”. I mentioned that Facebook was setting up as a short and I made the point that if we did correct we would see support at the $46.50 level. Where did we close today? $46.20. For those who are technical animals and clamor that it is a breakdown below support I wouldn’t get to giddy yet. Support levels are pillows not steel I beam so we can give an allowance of a couple of dimes. We are at support last  seen back in early October.  The fact that we closed down today on rising down volume on a holiday is a concern. My guess is that we see a brief rally in Facebook and then correct a bit further.

Why do I not Like Facebook? It has nothing to do with the stock. It has more to do with the fact that the sector is tired as noted by the recet price performance in Yelp and Linkedin. Add to the equation that the Twitter IPO has money rotating out of other social media stocks and into Twitter.

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Daily chart of Facebook (FB)

More concerning to me of late is the Russell 2000 which my all chart views is very overbought and ripe for a decent correction. With Facebooks mobile ad business growing I think it will be a buy but at lower prices. We booked 109% profits in Facebook and if you would like to check out how we traded it check out my video posted on October “Profits Taken Facebook“