Chart of the Day: It's 'Put Up or Shut Up' for Meta
The technical picture looks bearish, but earnings this week could change things.
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It is "put up or shut up" time for Meta Platforms (META) this week. That means earnings, and hopefully the outcome won't be much like it was the last quarter, when CEO Mark Zuckerberg opened up the company checkbook and said they would "spend spend spend" on AI and other initiatives.
Notice the huge falloff in October near the highs. Now, one could say this was simply a drop following a strong move higher from the spring, but that breakdown following earnings was on very high volume, and there was follow-through to the downside.
No question this was a bearish situation that had to play out, and it appears a bottom was made in November. Yet, we do not see the candles in bullish territory; they have been pink or purple for weeks (bearish).
What does that tell us? The conviction to own Meta is just not there yet, so investors/traders are probably going to wait and see what is said first. The company will likely post some good results again, but it is what we hear from management that is more important here.
The technical picture looks bearish, but the supporting indicators are trying to make a move to the bullish camp. Moving average convergence divergence (MACD) is right near a buy signal crossover and stochastics are rushing up. Momentum is starting to rise but we need to be careful that the move last week was not more short-covering, which means the stock can head right back down if the market does not like the upcoming report.
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At the time of publication, TheStreet Pro Portfolio was long META.
