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Oil spikes over 1% as Israel intensifies attacks

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Asset Watch

Could Meta Platforms make a comeback in 2023?

Thursday, January 12, 2023

After plunging by more than 60% in 2022, Meta Platforms was removed from the Mount Rushmore of S&P 500 heavyweights. However, with great dispersions often leading to great reversions, Satori Fund Manager Dan Niles expects a reversal of fortunes in 2023. On Jan. 3, he wrote:
“Meta’s Instagram Reels product (which competes with TikTok) went from an annual run rate of $1B in revs in their June quarter to $3B in revs in the September quarter of 2022, with user growth and engagement remaining surprisingly solid.”
Adding,
“The stock is down nearly 70% from its highs and Meta may be one of the few companies that sees its multiple expand while multiples for the market decline in 2023.”
Meta Platform Stock Chart Trading View

Even though 2022’s winners may come under pressure as the Fed fights inflation, has Meta Platforms’ damage already been done?

If so, the technical backdrop has become highly constructive in recent days. For example, every rally attempt in 2022 ended when the stock reached its 75-day moving average. But, with a breakout occurring on Jan. 3, the trend has shifted from bearish to bullish.

The only caveat is that the stock’s daily RSI hit ~68 on Jan. 10, which means it’s approaching overbought conditions. Therefore, a pullback near the 75-day MA ($120) may be an attractive entry point if it showcases relative strength versus the S&P 500.

As a result, could Meta Platforms be ripe for a reversal, or will new lows materialise before its bear market ends?


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