A 4-Day Rally For Facebook Ahead of IPO Analyst Quiet Period Expiration (FB)

One thing that is happening is that after Facebook shares lost 30%, many investors believed that the retail stop-loss of 30% was probably beyond the final selling pressure here.  Some investors are also starting to leg into the stock ahead of the IPO quiet period expiration at the end of next week.

After 40 days the analysts can make calls and there is a growing belief that analysts will issue positive calls on the company and that the objective price target will be up somewhere around that $38.00 price to match or exceed its initial public offering price.  Thomson Reuters currently lists the consensus price target at $38.56.

Another development still happening is that the call option trading in the nearest strike prices for July options expiration has been elevated.  If you combine the $31 and $32 CALLS the combined volume was recently more than the combined open interest of the two strike prices. The same is true if you combine the options volume of the $30, $31, and $32 July PUTS, but the volume is lower in the puts.

So, the question is whether or not Wednesday can mark the fifth consecutive day of gains.

JON C. OGG