Much has been written about how ad dollars dried up during the coronavirus pandemic. That's one of the main reasons why Alphabet (NASDAQ 🙂 disappointed last week.
At the same time, Google's parent company, Facebook (NASDAQ 🙂 – which also relies heavily on ad spend and was targeted by a much-publicized advertising boycott – reported, but the social media giant was amazed at the bright side.
The reason Google's advertising funnel dries up during this pandemic as Facebook's ad revenue continues to grow is the following: Google's AdWords system relies on user searches to find products or services, while Facebook targets users and show ads based on their interests.
A Google search can be more effective in the short term and lead to actual sales, but Facebook's focused approach increases a brand's longer-term impact while building a loyal base fan, leading to an over generally higher growth over a longer period of time.
Technicals follow these business models.
BiederL last week when it was sold after the publication of the earnings. On the other hand, Facebook completed a bullish, H&S continuation pattern after gains as stocks rose. Both the RSI and the MACD supported the reversal.
However, beware of Friday's hanging man, who occurs when an alleged short squeeze pushes prices up. This was confirmed by Monday's lower close.
This is bearish and increases the chance of a relapse. However, the previous escape opening should be able to accommodate a bearish counter-attack.
Note: Some analysts may argue that the pattern is a rising wedge (dotted line as bottom), which is bearish. While the upward outbreak has the potential to be a fake out, the dynamics that generally lead to sell-off after a rising wedge are there when the pattern follows a downward trend. However, this is in an upward trend.
Also, the RSI and MACD show that both momentum and price prospects support the upward breach, with the exception of the only caveat we have made in our bullish scenario of the confirmed hanging man.
Therefore, pay close attention to the following section and find your place within the various trading options.
Trading Strategies
Conservative traders would be waiting for the hanging man eruption, with a lock above the $ 260 round number, which is a minimum of 3% price / 3 days of penetration of the H&S neck (preferably for a weekend recording), reducing the chance of a bull trap.
Moderate traders would be pleased to see the price break from the alleged resistance of the hanging man – on a lock basis – which would also include a 2% price / 2 days filter, reducing the chance of a false outbreak .
Aggressive traders can take an unruly, short position – provided they have the correct timing – with an assumed drop, to "fill the gap" (a mythical conjecture) before entering the market with a long position.
Trade Sample – Aggressive, contrary short position
Entry: $ 255, because price retests the hanging man's resistance
Stop-Loss: $ 256
Risk: $ 1
Target: $ 250 – psychologically round number and neck support
Reward: $ 5
Risk: Reward Ratio: 1: 5
Note : This is just a trade sample. It has no magical powers. We are not prophets. We simply tell how aggressive traders can manage this trade – which they may lose – and have provided the basic components of a coherent trading plan. If you don't understand the mail and inherent risk of this transaction, don't trade but gamble.
Feel free to adjust the trade to suit your budget, temperament and timing.
Alternative Examples
If you have the patience and risk threshold, you can target $ 145 to double the potential reward.
If you're concerned about missing the shorts, go in before waiting for such an ideal entry, with the risk of increasing exposure.
