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Trends & Analysis
News

Crude oil breaches $70 amid geopolitical concerns

News

Will silver soar to $35?

News

Nike’s shares slide despite earnings beat

News

GBP/USD holds close to multi-year highs

News

Is Apple approaching a major move?

News

US dollar dips on inflation data, Yen surges

Asset Watch

Will Meta Platforms’ magnificent run continue?

Tuesday, April 9, 2024

Despite buoyant U.S. nonfarm payrolls, another spike in U.S. Treasury yields, and some Fed officials striking a more hawkish tone, the S&P 500 shrugged off all three en route to a 1.11% gain on Apr. 5. And though the trend is your friend, maintaining a bullish bias seems prudent until the technicals suggest otherwise.
An example of this is Meta Platforms which has been on a tear, as Jefferies and RBC Capital Markets raised their price targets to $585 and $600, respectively, last week. The former said that “Meta has too many advantages to count” and sports “several strategic advantages over its peers.”
The latter added that in the AI advertising space, “META indicated as strongly as we’ve ever heard over GOOGL on a relative basis.”

While the long-term fundamentals remain resilient, you should monitor some key momentum indicators to predict short-term price action.

Meta’s 20-day moving average (the blue line at the top) held throughout most of the rally off the 2022 lows. However, when breakdowns occurred, choppy price action ensued, and the bulls struggled to push the stock higher.

Meta also showcased a negative RSI divergence in mid-2023, where the blue line at the bottom made lower highs while the stock made higher highs (depicted by the vertical white line on the left). A breakdown below the 20-day MA eventually followed.

With a similar RSI divergence now present, pay close attention to the 20-day MA (near $500). If it holds, a bullish position is justified for as long as Meta trades above the key metric.

So, will Meta keep marching higher, or will a better entry point emerge in the weeks ahead?


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