In this blog post, we will look at Meta Platforms stock (META) on a weekly stock price chart. We will be using technical analysis to find out when it might be a good time to buy or sell the stock.
First, we let us locate the crucial support and resistance levels on the weekly chart. The support level indicates the price at which buying pressure is expected to arise. While the resistance level denotes the price at which selling pressure is expected to emerge.
Based on the chart, we can see that the stock is currently at a resistance of $222. Then, it followed the 200 weekly moving average resistance at $232. Then, there seems to be a first level of support around $185 and the 50 weekly moving average support at $158.
Technical Indicators
Technical indicators can also be used to identify potential entry and exit points. In this analysis, we will be using the moving average convergence divergence (MACD), relative strength index (RSI) and stochastics.
• The MACD, a dependable metric for evaluating trends and stock momentum, indicates a bullish trend as the violet line has been above the orange line for weeks. Since these lines are at the upper band, it is likely that the stock will see some selling pressure soon.
• RSI is another effective tool for determining whether a stock is overbought or oversold. When the RSI crosses above 30, it indicates a buy signal, and when it crosses below 70, it indicates a sell signal. Since the lows at 20 towards the end of 2022, the RSI value has constantly risen and it is currently at 72. This means that we are near the overbought levels and it is indicating a downward or consolidation of stock soon.
• Stochastics, another technical indicator, can help investors predict whether the stock will continue in its current direction or undergo a trend reversal. When the black line crosses over the red line, it is considered a bullish sign and vice versa. The black line has been above the red line for several months. It’s value is currently at a very overbought zone of 98. Hence, we may see a trend reversal very soon.
Should I buy META stock now?
After analyzing the weekly chart of Meta stock, we can see that it is currently in a very overbought zone. All technical indicators are showing a trend reversal either downwards or consolidation in the coming weeks.
The stock is clearly not a buy right now. For long-term investors, it is better to wait for the stock to fall or consolidate before buying it. Based on technical, if the stock moves to a consolidation zone, an ideal entry price would be at the nearest support of around $185.
As with all investments, it is important to conduct your own research and analysis before making any trading decisions.
