My suicidal speculation

Well, it has been a brutal two weeks selloff and I have become stubbornly more and more bullish with each further selloff. Next week, we are going to see two major earning reports, Apple and Facebook. Usually I won't talk about earning speculation as it is often a suicidal bet. You never know when good news is good and when good news becomes bad news. All depending on the mood of the traders at that moment in reaction to the earnings. But from time to time, the technical setup may foretell something how traders may react. Just for fun today and let me give you my thoughts for the two to see if there is any merit with their technical forecasting. But let me be very clear, there is no way to know for sure how it will play out as TA is not a science but an art with no precision. Don't try this simply based on my technical speculation.


Let's start with FB. Probably no one wants to touch FB at the moment and it has been in a clear downtrend since Aug and has been in its lows not seen for two years! The sentiment for it is hugely negative and depressing but this is a very bullish contrary indicator actually. Well, its technical setup is also telling us something with a positive momentum divergence, suggesting a turning point could happen anytime. Maybe the coming earnings report is a catalyst to trigger a up run? I think it is quite possible. As you can see, it has a huge gap between $180 to $215. Technically a stock tends to fill the gap at some point. Maybe we will see the start of this rebound next week. Again, don't take my words seriously if you want to bet. I could be very wrong!!

For Apple, I'm not so positive. Sentimentally it is quite positive during this selloff and it is one of the few tech stocks that have not been sold down much till now. This is not so good a sign from the contrary perspective. Then technically its daily and weekly momentum MACD is turning down actually, a bearish sign for the stock. It is a 50/50 bet at best for its earnings call. The most worrisome part is that, if it indeed gets crashed, it could be very severe as it has a huge gap between its 50 vs 200 DMA. It could drop more than 20 points easily if the trigger is ignited. So I will be very careful to bet for long for Apple for now.