Facebook (FB) appears to be at a major decision point: Will it move up or down as it closes in on its apex? While this stock can move with the markets, it mostly runs on its own news and events. The wedge in place (see the chart below) shows support in the area of 56; note the shaded area. Interesting, this is where the bulk of the volume and price action has been since earnings were announced. The gap clearly shows the balance between buyers and sellers. That struggle will end shortly, but we’ll have to wait and see how it resolves. With that said, given the good relative strength and improving momentum indicators, Facebook could very well move to the upside.
When it comes to options trading strategies around Facebook, we could put on a simple call play here for June; perhaps the 60 call would be the best choice. A more conservative play would include buying a 60/65 call spread to alleviate the risk.
