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Trends & Analysis
News

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News

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News

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Asset Watch

Scoop up Meta Platforms ahead of support?

Tuesday, August 29, 2023

Despite Fed Chairman Jerome Powell reiterating that interest rates could rise further, the S&P 500 shrugged off the negativity and closed higher on Aug. 25. And as the U.S. GDP growth holds up despite the rapid rise in borrowing costs, stocks can prosper if a soft landing unfolds. So, should you bet on a recovery and buy the pullback in Meta Platforms?
Wedbush analysts placed an outperform rating on Meta Platforms on Aug. 22, writing that “eCommerce and advertising post-COVID growth rates are bottoming and the underlying secular growth trends underpinning the industry should re-appear in coming quarters.”
“We expect global eCommerce growth to return to ~10%+ levels and digital advertising to a similar 10%-12% in the coming year. In addition, we expect AI to become a growth stimulant for consumer technology over the next 2-5 years.”

If the fundamental predictions prove prescient, Meta Platforms could provide immense value at these levels. The stock is inching closer to its 20-week moving average, and the blue line has been a major support and resistance level over the last few years.

 

Moreover, when the stock broke below the 20-week MA in January 2021, it found support near the late 2020 closing lows. As a similar setup now presents itself, a breakdown below the 20-week MA of $272.15 would put next-level support near $250.

 

With Meta Platforms ending the Aug. 25 session down by nearly 13% from its 2023 high, is this a buying opportunity?


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