Scribd
Upload
46 views

Fig 1. Facebook Daily Chart. The Sept 2012 Low and Nov Trough Set The Angle of The Only Up Trend Line Support (TL

The document analyzes Facebook's stock price charts from September 2012 to June 2013. It identifies key trend line support tests and divergences between price and RSI that signaled potential price reversals. Specifically, it notes a bullish RSI divergence on the daily chart in June 2013 at the third test of an up trend line support, predicting the trend line would hold based on the rare and large divergence signal. Subsequent hourly and 5-minute charts showed strengthening divergences, confirming the likelihood of an upward price reversal, which subsequently occurred.

Uploaded by

api-201884858
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
46 views

Fig 1. Facebook Daily Chart. The Sept 2012 Low and Nov Trough Set The Angle of The Only Up Trend Line Support (TL

The document analyzes Facebook's stock price charts from September 2012 to June 2013. It identifies key trend line support tests and divergences between price and RSI that signaled potential price reversals. Specifically, it notes a bullish RSI divergence on the daily chart in June 2013 at the third test of an up trend line support, predicting the trend line would hold based on the rare and large divergence signal. Subsequent hourly and 5-minute charts showed strengthening divergences, confirming the likelihood of an upward price reversal, which subsequently occurred.

Uploaded by

api-201884858
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
You are on page 1/ 8

Fig 1. Facebook Daily chart.

The Sept 2012 low and Nov trough set the angle of the only up trend line support (TL
SUP), so the 3rd test would be a key location for possible support and continuation of the climb. A bullish RSI DIV at the
3rd trend line support test would be very logical. If there was a daily RSI DIV, then a further momentum changes in the
lower time frames, then it would make a price reversal highly probable. RSI DIV in three time frames (Daily, Hourly,
and 5min) is a set up know as fractal divergence.

Fig 2. Daily chart up to an including June 6th, 2013. Here we see a messy test of the 61.8% key Fibonacci support, it
runs from the low to the high for the current impulse wave. The low is also the 3rd test of the trend line support; a key
location for trend continuation and a price reversal. The classic bullish RSI DIV is also +14.4 (11.1% at time N, then
25.5% at N+1, the last bar). The PD value was 2.9; its been noticed that values over 2.0 in the daily chart on structural
points tend to be rare; more than often such a strong change of momentum precedes a price reversal.

Fig 3. Facebook hourly chart on June 6th up to 19:01 (the green candle is 18:00). Here we see the daily trend lines
test, there is a unique +5.5% classic bullish RSI DIV. This signal suggests that the TL might hold, however further
divergence in the 5min chart would increase the probability of a price reversal.

Fig 4. Facebook 5min chart, June 6th up to the 18:25 GMT candle. Here we see a +8.5% divergence across 5 bars;
the Price Deceleration <PD> value is = dRSI% / dT or 1.7. Values greater than 1.0 when price tests a support level
which is outside the range, tends to be strong leading indicators for a price reversal.

Fig 5. FB 5min chart. The TL SUP held.

Fig 6. FB 1HR chart. The stock moved $2.30 onside from the key TL SUP test at the 3rd tag.

Fig 7. Daily. There was only 4 daily RSI DIV signals; all were >5% and signalled price reversals. The 2012 July double
top DIV was -15% (PD 1.5) the naked 2012 low was + 12.0% (dT =22, so PD <1.0), then the 2013 set a double top DIV
on the July 2012 resistance level which printed - 5.3% (PD = 0.5). Finally, the 2013 low in June on the trend line support
was + 14.4% and its PD value was 2.9 ! That was a huge signal.

Fig 8. The previous chart prints $24.49 which was the late entry. The past low was $22.55 which gave the trade a $1.94
risk. As the stock now trades $106.60, this trade yields a 42R outcomes (+$82.11 / risk $1.94)

You might also like