MADRID. Shares of Meta Platforms plunged 13.5% last week, the biggest weekly loss since Januarywhen the stock plunged 21.15%, closing at $ 146.29, just $ 0.28, or 0.02% from the low of the March 16, 2020 pandemic closing price. Monday 1.56%, creating a bullish “piercing pattern”.
This is when there is a red candle followed by a green candle that closes completely inside the real body of the red candle. (price action between opening and closing, where the candlestick is solid, excluding intraday highs and lows, represented by the wicks). The green candle almost reversed all of Friday’s losses, almost forming an “engulfing pattern”, an even more bullish pattern. However, Meta has lost 56% so far this year, making it the worst of the big tech companies and more than double the decline. Nasdaq 100 during the same period.
Meta probably changed its name so that people would forget all the bad vibes the company created after the Cambridge Analytica scandal.. However, changing the company name was not enough. On September 14, he noted that Harvard Business School professor Bill George blamed the company’s demise of failed leadership from CEO Mark Zuckerberg.
Other issues
The new company Meta faced other problems, such as Apple’s iOS privacy update, which deprived Meta of its ability to use user information to target advertising. Zuckerberg failed to successfully compete with TikTok, which took away users and advertisers. Experts have also criticized Zuckerberg’s investment in virtual reality headsets and some believe he is betting too much on the metaverse.. On the corporate side, Meta reported disappointing results in the second quarter as it warned of another quarter of declining sales.
So why do I think the name change didn’t help the stock price? If Meta falls below $ 146.01, a 2020 low, it will be the lowest level since January 2019, when the company faced heated U.S. Congressional hearings on the Cambridge Analytica scandal, in which the consulting firm British had collected data from over 50 million Facebook users without their permission. What if I think the stock will continue to drop? Decidedly. But I hope they can rebound first in the short term. Let’s see the graph.
On August 30th I said Meta could reach $ 130. Last week’s sales completed the continuation pattern of the head and shoulders chart. The price has already fallen below its long-term uptrend line since 2013. The head and shoulders pattern was created on the breakout of that important support symbol.
Then, the head of the pattern reached the broken uptrend line again, showing that its support level had turned into resistance. Finally, the price broke the bullish trend line from the December 2018 lows. The coup de grace is the weekly ‘death crossing’, for the first time in the company’s history.
Remember our “piercing / engulfing model” though? The bullish development underlines the support from late 2020, which is likely to hit the headlines, encouraging long bets, supporting the price and creating momentum for a comeback to retest the head and shoulders chart within a descending channel.
Pinchas Cohen is an Investing.com analyst
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