Technical Take On Facebook

Everyone’s got an opinion about Facebook these days.

And as Mark Zuckerberg spent two days chatting with Congress, you can bet your bottom dollar that everyone and his brother was trying to figure out whether the stock is a “buy” or a “sell.”

I figured I might as well throw my hat in the ring.

I think it’s a “sell.”

Mind you, I’m writing this “sell” opinion without any knowledge of what Zuckerberg revealed in his testimonies. Or how investors will react once he’s back in the comfort of Silicon Valley and his signature grey t-shirt.

Personally, I’m interested in how the saga plays out. But I won’t be making any investment recommendations on my personal opinions, subjective assessments, or gut feel.

Remember, I’m a “technical” analyst… a “quant.”

I conduct statistical research on historical price action. And I design systems that tell me when to be in a stock and when to be out – all without requiring specific knowledge about a company’s fundamentals, or what its CEO will or won’t say in front of Congress.

Of course, others here at Dent have opinions on those matters. In fact, Rodney recently outlined his thesis for why Facebook’s a “buy” at these levels – in contrast to my technical “sell” opinion. And even though our analysis is somewhat in disagreement at the moment, I imagine we’ll be on the same page soon enough – either when Rodney’s risk-management measures kick in (if stocks turn lower), or when my technical systems reinitiate Facebook’s “buy” rating (if stocks continue higher).

At any rate, one of my systems, which I’ve used for many years now, is designed to keep me invested in stocks a majority of the time (since stocks go up in the long run)… while occasionally recommending a move to cash when one of three “sell signals” is triggered.