Below is just the C of 2 wave. It should rally until wave 5 is about the same length as wave 1. The play is so easy here it's not funny. Wait until that blue 5 plays out and then short this thing. Set stops above the top of the 5th of C and walk away without a care in the world. I can't promise you won't get stopped out if my count is wrong but the odds are sooooo with you on this one and the cost of being wrong will be a matter of a few cents loss on a $62 short. Them's the kind of odds any gambler should immediately recognize as having value.
Keep in mind that if this is a 2nd wave as modeled (and it very probably is) then the next wave is a 3rd (or a C wave). My target price for that is $44 and it should happen pretty quickly because C waves move rapidly per unit time. This makes FB an ideal candidate for buying puts. I like the Sept 2015 $45 puts which are now $1.48 at the bid and $1.53 at the ask with last being $1.51. That is a reasonably tight spread which makes it more attractive. I expect that these will trade north of $7 in June. You would hold these until the bottom of wave 3 or C and then cash out.
3 comments:
" I like the Sept 2015 $5 puts", did you mean to write $50 puts?
HA, nice catch. Yeah, not 5 but 50. 5 maybe 2017 ; )
I'll edit the post to fix it. Appreciate the editing help, it is a lot of work to check everything for spelling and typos like this.
Whoops, not 50 but $45. I missed the 4, not the 0. It's the 45 puts that were trading ~1.50 yesterday, not the 50s.
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