Shares of Meta Platforms, the parent company of Facebook and Instagram, may face more trouble according to a closely-watched technical indicator. The stock broke below its 50-day moving average, marking a reversal from the strong uptrend it has experienced over the past eight months. This trend reversal could be concerning for investors, as the moving average is often used to gauge a security’s momentum. While some analysts believe this could be a sign of a pullback or consolidation phase, others are watching for further downside potential. The next support level for Meta is at $252.50, but failure to hold there could result in a move back to $215.
One analyst, Carter Worth, is particularly focused on the $265 to $270 level, where the 150-day moving average comes into play. Worth suggests that this would be a good area to short the stock and wait for further developments. Another analyst, Frank Cappelleri, highlights that Meta has also completed a double top formation, which is a bearish chart pattern. This formation occurs when an asset fails to break above a particular level on two occasions, and a pullback after the second top can be sharp. Cappelleri notes that if Meta fails to reclaim the area near its moving average, it could potentially reach a downside target of $250, representing a 13% pullback from its recent close.
In summary, Meta Platforms’ shares have broken below their 50-day moving average, signaling a reversal from the stock’s strong uptrend. Market technicians are closely monitoring the stock’s momentum, with some suggesting that a pullback or consolidation phase is underway. However, if the stock fails to reclaim its moving average, it could face further downside potential. Analysts are watching key support levels, such as $252.50 and $265 to $270, to determine the next direction for the stock. Additionally, Meta has completed a double top formation, adding to concerns about its future performance.