Since we published our Facebook Stock Price Predictor earlier this year the algorithm has worked beyond our expectations, thanks to our crack team of technicians, theorists, and programmers.  Facebook has been on the market for just over a year so it is difficult to establish clear patterns, but our algorithm has identified at least one and has returned over 70% since inception.

Since their July earnings announcement, Facebook has popped a whopping $13 (50%) , so one would be forgiven for believing the stock is ripe for a correction  (..and, for the record, we think so too based on our research into fundamentals and company risks) however, in today’s algorithmic and mania-driven markets, we’ve learned that the market does whatever it wants to, even if it’s contrary to company fundamentals.

From a technical perspective, the stock has reached the top of a channel that has developed over the past year.  The stock has since corrected $3.00 from the $39 high on August 6th, then has rebounded to $38.50.  Short sellers must be drooling over the prospects of easy money to be had at this price, but our algorithm has other ideas: According to it, the stock is still in it’s up trend and our proprietary indicator is showing further momentum to the up-side, perhaps to test $40 or higher.  If this happens, those drooling shorts will be crying in pain as everyone is forced to cover as the stock rockets higher.

Whether you want to short the stock or invest over the long term, it would be wise to wait until the next signal from our stock predictor.