GREAT post on the SMB blog

This is a great post.

Why FB was a long
http://www.smbtraining.com/blog/why-fb-was-a-long?utm_source=rss&utm_medium=rss&utm_campaign=why-fb-was-a-long

Here are the key points, I’ve put them in a quote box, but I have very slightly paraphrased:

1. A lot of people are caught short over the last few days as Facebook has been in a downtrend.
2. On top of that people were caught short intra day. Above 27.36, everyone short intra day would cover because this was the level that it failed at several times.
3. Also, this was the reversal pattern on the hourly chart adding more fuel to the fire.
4. A ton of volume came in and the stock showed tremendous relative strength that we have not seen in this stock lately.
This was a change in character.

Great response from Mike B. too (my bolding):

Very good language Leo.
If a stock in a longer term downtrend clearly has a change of character then you can consider getting long.
Increased Volume.
Breaks the Intraday downtrend.
Lots of shorts perhaps trapped.
These all help.

Please note, these ideas are for traders. For a trade (or trades).

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