It’s not my place to pontificate about Facebook’s earnings miss. It is however a good reminder about why I dont hold stocks through earnings. A lot of hard work and profits can be erased in a few seconds. I wrote about “Defining your Game” a few days ago. Not participating in binary events with no edge is one of my rules.
The main problem on the earnings and conference call is a deceleration of earnings. This in turn will require a re-rating by the analysts. Because Facebook is so widely held by institutions it will be important to see how the name trades over the next few days. It may be that the problem is contained within Facebook. It could however result in a de-risking of FANG names within the institutional portfolios. We will have to wait and see.
Key Technical Levels
Facebook is set to open around $180. The key place on the chart for me is $170. This is the level the long term weekly trend line intersects. So a weekly close tomorrow would be a significant “save”. Closes below $170 open the door to re-test the mark lows down near $150.
Amazon and Intel both report today. Their key levels below. These names, along with Facebook are key components within QQQ. Anything that happens to the individual names will ripple through the Q’s