FB: How (wisely) to BUY the DIP?

JulianAlerander
2022-02-09

Hello traders and investors! Let’s see how FB is doing today! Some may say it is never wise to try to buy the dip. Let's see if this argument makes sense. After earnings , FB is in a very strong bear trend, and it seems there’s nothing to help it. However, if you want to buy the dip, there’s a right way and a wrong way of doing it. Always avoid buying something only because it “dropped too much”. We can’t possibly know where the bottom will be, but eventually, the charts will give us clues when the bear trend starts to get exhausted. A bear trend is defined by lower highs/lows, and as long as we see this pattern, FB will not be a buy. To be honest, it is not a sell either; as it seems it is too late (the moment to sell was near $ 350). What could change things? If it does a higher high followed by a higher low, it’ll do something new that will break the bias. What’s more, there are many bullish chart patterns that could appear in the next few days/weeks that could work as bullish reversal patterns (for example: Double Bottom , Cup&Handle, Inverted H&S , etc.). It is not wrong to try to catch the dip, but if you have a strategy, and if you use the charts to do the proper risk management, everything will be alright. Now, let’s look at the weekly chart:

Yes, FB lost its two last supports, and it seems it wants to hit the black line at $ 207, our next support. When you are waiting for an opportunity to catch the dip, it is perfect to see a good bullish reversal reaction near a strong support level . If FB reacts near the black line, the risk/reward ratio would be good, and it makes sense to try to get advantage of some exhaustion. To sum up, look for a clear bullish reversal, preferably, near a support level . The risk reward ratio would be attractive, and you won't buy only because your "gut feeling" is telling you. In this circumstance, it is very wise to try to catch the dip.$Meta Platforms, Inc.(FB)$

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

  • Shockingviz
    2022-02-09
    Shockingviz
    Need to look at the overall company’s long term outlook before deciding whether to get the dip
  • ToTheSun0000
    2022-02-10
    ToTheSun0000
    I feel like facebook business model is nothing special. Competition everywhere
  • Sctzilla
    2022-02-09
    Sctzilla
    Dont buy dip until the macd is positive
  • LKKLKK
    2022-02-09
    LKKLKK
    i bought [smile]
  • riel.
    2022-02-09
    riel.
    wait and see for now ...
  • shadow82
    2022-02-09
    shadow82
    thanks for sharing
Leave a comment