Facebook Stock Remains Strong Despite Shaky Markets: What's Next?

Meta Platforms, Inc FB shot up about 3.5% higher at one point on Monday despite the general markets slipping, with the SPDR S&P 500 closing down 0.89%.

On Tuesday, the bearish pressure in premarket overpowered the tech giant, however, and Meta gapped almost 2% down off Monday’s closing price but as soon as the markets opened huge bullish volume came in and pushed the stock up.

The strength in Meta’s stock comes as the company shifts its focus toward creating a virtual world, called a Metaverse, where people will be able to interact with brands, trade cryptocurrencies and even attend virtual concerts. Last week, a Jefferies analyst compared investing in the metaverse to investing in the internet in its early days and predicted virtual worlds will be the biggest disruptor to how people live that has ever been seen.

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The Facebook Chart: On Dec. 3, Meta hit a seven-month low of $299.50 where bulls came in and bought the dip, which resulted in a wick from the level and a bullish hammer candlestick to print. The stock then reversed course into an uptrend and has made one higher high and one higher low as confirmation.

On Monday, Meta printed a higher high at $341.09, which was above the most recent Dec. 9 high of $336.13 and on Tuesday the gap down created a second higher low above the Dec. 10 low-of-day at the $326.37 mark. For the stock to continue in an uptrend, Meta will need to print another higher high over the coming trading days.

Meta’s relative strength index is registering in at about 54%, which is a very comfortable level for the bulls. The stock has room to move much higher in price before the RSI would become extended.

Meta is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day and 21-day EMAs trading in line with each other, both of which are bullish indicators. If the stock continues to trade above both moving averages, the eight-day EMA will cross above the 21-day, which would give bulls more confidence going forward.

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• Bulls want to see sustained big bullish volume push Meta up to make a higher high to further confirm the uptrend. There is resistance above at $333.78 and $341.78.
• Bears want to see big bearish volume come in to drop Meta down below the Dec. 10 low-of-day to negate the uptrend. The stock has support below at $324.50 and $313.27.