24 May Day Trading facebook
Thanks for your comments on my recent post “How I traded facebook”. I received a lot of emails from you asking me more details of how I made money from trading facebook (symbol FB). So what I have done for all of you is attach a chart of FB from Friday. This is a 2 minute chart of FB and you will see the stock start trading at $42 but fall sharply soon after as traders dumped the stock. However, look at how it stopped falling right at $38 and remain there for 6-8 minutes. From what I’ve read, it was Morgan Stanley, the lead underwriter for the IPO who was supporting the price at $38. They were buying tons of FB stock at $38 from sellers who wanted to dump the stock. With Morgan Stanley supporting the stock price, this is where I pounced and bought the stock at $38.01 and then took my profits at $40.
Poor Morgan Stanley! With the current stock price at $32 right now, they potentially have a huge loss on their hands. As I type right now, it looks like the stock price is holding the $31 price support level as it hasn’t gone lower. If it holds then it could be a short term bottom. Full disclosure: I do own FB shares and started a position at $31.05.