Meta Platforms: I'm Looking at the Charts, Not the Headlines

Buyers have been attracted in the $180 area in March, April and now.

The news headlines in recent months on Meta Platforms (FB) (a.k.a Facebook) have been hard on investors. In its history of just 18 years the social media giant saw a fall in its daily users, as half a million users stopped using it toward the end of the year 2021. FB has disappointed analysts and investors in recent quarters and the stock slumped Tuesday on the heels of Snap's (SNAP) disappointing numbers.

Let's check on the charts and see how the indicators are moving.  

In the daily Japanese candlestick chart of FB, below, we can see that the shares turned sideways the past three months. Buyers have been attracted in the $180 area in March, April and now. The daily On-Balance-Volume (OBV) line has been steady in the past three months, which is a shift from the pattern of aggressive selling in prior months.

The 12-day price momentum study shows higher lows from February to April to May and that can foreshadow a rally in the days and weeks ahead. Today's candle could be a doji or a spinning top and tells us that buyers and sellers are in balance. A bullish candle on Wednesday can tip the balance. 

 

In the weekly Japanese candlestick chart of FB, below, we can see some positive clues. A large lower shadow below $180 could be a key clue as traders rejected that level.

 

The weekly OBV line shows recent improvement and Moving Average Convergence Divergence (MACD) oscillator is close to a cover shorts buy signal. 

 

 

In this daily Point and Figure chart of FB, below, we can see a potential downside price target in the $101 area. A trade at $198 will improve the chart. 

 

 

 

Bottom-line strategy: A rally in FB above $181 Thursday afternoon would be encouraging and tell us that buyers are being attracted to FB and not worried so much about current headlines. 

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