The Facebook (FB) Circus continues today as the IPO underwriters are now allowed to begin coverage of the stock. While JPMorgan (JPM) and Goldman Sachs (GS) issued highly favorable reviews with high price targets – $45 and $42 respectively, the reports were mixed. For example, Morgan Stanley (MS), the chief underwriter of the IPO and the bank responsible for setting the IPO price, issued an overwieght rating, but set a price target of just $38. In other words, Morgan Stanley does not expect the stock to surpass its IPO price in the next 12 months.
Today, Facebook opened to a a large gap down and briefly traded lower. However, by mid-morning Facebook had begun moving up and filling the gap. The roller coaster continued, though, and Facebook has now traded down to the lows of the day. Right now on the Daily Chart, Facebook is putting in a series of higher-lows, a bullish sign. Micro resistance is at Monday’s high of $33.02, and the next resistance level to watch is $33.44-33.45, the highs from yesterday and Friday.
By Phillips Hogan
Disclosure: Author has no relevant position