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Trends & Analysis
News

Avoid the tech wreck with PayPal?

News

Week Ahead Preview: 22nd of April

News

P&G shares rise despite Q3 sales miss

News

Gold continues to shine amid geopolitical worries

News

Crude oil dips for 3rd session after supply data

News

Is there an AI upside for AMD?

Asset Watch

Should you short Meta Platforms?

Thursday, March 2, 2023

With Meta Platforms going from a major underperformer in 2022 to a major outperformer in 2023, analysts are bullish on the company’s long-term prospects. Morningstar Senior Equity Analyst Ali Mogharabi has a $260 price target and on Feb. 2 wrote:
“Meta appears to have improved ad conversions on its apps and measurability, increasing demand from advertisers and lessening the impact of Apple’s moves. On the user front, the firm’s network effect remains intact, displayed by daily and monthly user growth. We are pleased with management’s effort to exert cost control while accelerating top-line growth.”
Yet, while the long-term fundamentals remain resilient, could Meta Platforms be a tactical short over the next few weeks?
Meta Platform Stock Chart Trading View

When the company reported weak third-quarter earnings in October, the stock cratered en route to its 2022 low. More importantly, a meaningful gap emerged as the after-hours plunge caused the stock to open much lower the next day. However, the gap was eventually filled during Meta Platforms’ 2023 ascent.

The Q4 earnings outperformance in February sent the stock soaring by more than 20%, and another large gap is now present. It remains unfilled though, so Meta Platforms has to decline to $153.58 to achieve the milestone. For context, it requires a more than 12% decline from the Feb. 28 close.

Likewise, its daily RSI remains elevated and the 20-day MA is now resistance. As a result, should we expect a short-term pullback, or will the advertising giant continue its rapid rise uninterrupted?


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