How Meta Platforms (Formerly Facebook) Stock Looks Heading Into Q1 Earnings Print

Meta Platforms, Inc FB is set to print its first-quarter financial results after the market closes on Wednesday. The stock was trading about 4% lower heading into the event.

When the tech giant printed its fourth-quarter results on Feb. 2, the stock plunged over 26% the following day and after consolidating sideways in a tall trading range, eventually fell to a new 52-week low of $174.12 on Wednesday.

For the fourth quarter, the company formerly known as Facebook reported an adjusted EPS of $3.67 on revenue of $33.67 billion. Meta missed the consensus estimate of $3.84 per share but beat slightly on revenues. For the first quarter, analysts estimate that Meta will report earnings per share of $2.56.

From a technical analysis perspective, Meta’s stock looks likely to bounce higher before continuing in its downtrend but it should be noted that holding stocks or options over an earnings print is akin to gambling because stocks can react bullishly to an earnings miss and bearishly to an earnings beat. Options traders particularly, those who are holding close dated calls or puts, take on extra risk because the intuitions writing the options increase premiums to account for implied volatility.

The implied move for options of Meta expiring this week is 12.85%.

Want direct analysis? Find me in the BZ Pro lounge! Click here for a free trial.

The Meta Chart: Meta has been trading in a steep downtrend since April 5, losing about 25% of its value between the high of $236.86 and Wednesday’s $169 low-of-day price. The most recent lower high in the trend was printed on April 19 at $218.43 and the most recent confirmed lower low was formed at the $208.30 mark the day prior.

• If Meta closes the trading day flat or near its high-of-day, it will print a doji candlestick or hammer candlestick, respectively, which when found at the bottom of a trend, can indicate a bounce to the upside is on the horizon. If Meta trades higher on Thursday, Wednesday’s price action will mark the next lower low in the downtrend.
• Even if Meta closes the trading session near its low of day price, it will print an inverted hammer candlestick, which could also indicate the stock will trade higher on Thursday.
• Meta also looks set to bounce because its relative strength index (RSI) is measuring in at about 27%. When a stock’s RSI reaches or falls below the 30% level it becomes oversold, which can be a buy signal for technical traders.
• Meta has resistance above at $181.50 and $190.14 and support below at $173.09 and $164.20.

See Also: What Went Wrong At Meta Last Quarter And How Pete Najarian Is Positioning Ahead Of Earnings After The Bell