The gap from earnings has not been rejected through lower prices, therefore it’s been accepted.
For about a month we’ve seen an equillibrium between buyers and sellers.
Given the fact that anyone who has bought FB at anytime since it’s been public… is profitable… clearly the buyers are in control here.
It’s not that shorts will get squeezed… it will be investors with cash on the sidelines who get a case of FOMO once FB clears $120 per share. You’ll have the technical analysis buyers on that breakout, and odds are above $120 will also make headlines and generate even more FOMO.
Here’s the trade I’m taking:
Buy to Open FB Jul 120 calls @2.70 or lower
Full Risk
If you want to be more conservative, Then sell the July 115/110 put spread @ 1.00 and run a stop on a close under 115.