A Look at the $FB Fractals

I last discussed $FB here. In that post, I upgraded the count to a nest of ones and twos because the depth of the recent selling was more akin to a 2 than the 4 I had previously expected. Now, why would one want to do a nest like that? Well, for one, in a market that just will not die, it seems prudent. And, at least from the COVID crash lows, we only have three swings, like this (green arrows):

FB

However, what if the COVID crash was only a part of a larger fractal? So, zooming out, we may have this:

FB

All five swings in place. Yikes. And it gets worse, if we zoom out even more:

FB

Picking tops (and all-time tops) is risky, stupid, foolish business, but the potential is there and tops do form. And wouldn’t it be perfect having coincided with a brand change like that…

So, let’s zoom way in. It does happen to count well as an impulse wave down, and we’ve retraced back to the 50-61.8% range of the prior decline. Now, the good news is, we’re going to find out right away what’s what here, because the target for a third wave to the downside is the orange box below and that move will be unmistakable.

FB

[UPDATE]: Because this failed as expected from the orange box we were in, I will file this under “Successful Calls.” That said, I am not entirely sure if this is just a correction or something worse (a new trend). I will need to monitor the price action from here prior to making a new call.

FB


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5 thoughts on “A Look at the $FB Fractals”

  1. If that happens, their P/E would drop from 24 which is already low for tech to 16? Wouldn’t that be unheard of? Wouldn’t new investors invest massively in FB if it’s P/E went <20 preventing further decline ?

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