This post was just published on ZYX Buy Change Alert.
This idea is only for aggressive investors, conservative investors may consider staying away from this trade. There is a trade here for both medium-term and very short-term investors.
Medium-Term Trade
FB came public at $38, fell to $17.55, ran up to $32.52 and now has fallen back to $25.72 as of this writing. On Thursday there is a Facebook event. The invitation says, “Our new home on Android.” Rumors abound about a Facebook phone using HTC hardware running a highly customized flavor of Android. It is worth keeping in mind that Zuckerberg has previously clearly stated that a phone makes no sense for Facebook. In any case, the Thursday announcement may be a trigger for the stock to move up. However, risk is high, therefore we recommend starting only a 10% position right here in the zone of $25.65 to $25.73.
There are several events ahead for Facebook both positive and negative. The plan is to slowly accumulate on negative news if the stock falls. No stop for the time being as the process of accumulation has just started. Target zone is $35 to $38.
Those who must use stops may consider $16.23 to $16.38.
Very Short-Term Trade
We recognize that some of our subscribers will take on additional quantities for a very short-term trade in addition to the medium-term trade. Such a very short-term trade is a high risk, high reward opportunity. If the Thursday announcement is a game changer the stock can easily and quickly run up to $32 again. On the other hand, if the announcement is disappointing and accompanied by a down draft in the overall market, the stock will fall. Anyone undertaking a very short-term trade in addition to a medium-term trade may consider a stop zone of $24.33 to $24.43 for partial quantity and $24.68 to $24.73 for the rest.
