Trading Strategies For Meta Platforms Stock Before And After Q1 Earnings

Meta Platforms, Inc META is set to print its fiscal first-quarter financial results after the market closes Wednesday. The stock was trading over 1% higher heading into the event.

When the tech giant printed its fourth-quarter results on Feb. 1, the stock surged about 23% the following day and since then has increased an additional 12%.

For the fourth quarter, Meta reported EPS of $1.76, which missed the Street estimate of $2.22. The company beat on the top line, printing revenues of $32.17 billion that came in above the $31.53-billion estimate.

For the first quarter, analysts estimate Meta will print earnings per share of $2.03 on revenues of $27.62 billion.

Here's what to watch when Meta reports earnings after the bell.

Ahead of the event, RBC Capital analyst Brad Erickson reiterated an Outperform rating on Meta and maintained a price target of $225. The price target suggests about 6% upside for the stock.

From a technical analysis perspective, Meta’s stock looks set to trade lower over the coming days due to the confirmation of a downtrend trend, but it should be noted that holding stocks or options over an earnings print is akin to gambling. 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 institutions writing the options increase premiums to account for implied volatility.

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The Meta Chart: Meta started trading in a downtrend on April 13 and has since made a series of lower highs and lower lows. The most recent lower low was formed on Tuesday at $207.13 and the most recent confirmed lower high was printed at the $213.92 mark the day prior.

• On Wednesday, Meta attempted to break up above Tuesday’s high-of-day but failed and wicked down from the area. The attempt may have created a bearish double top pattern at the level. If Meta suffers a bearish reaction to its earnings print, the double top will be recognized and a longer-term downtrend could be in the cards.
• If Meta enjoys a bullish reaction to its earnings and breaks up to print a higher high, the downtrend will be negated and a new uptrend could confirm. If that happens, traders not already in a position can watch for the stock to eventually retrace to print a higher low above $208.
• Meta has resistance above at $216.15 and $230.31 and support below at $200.69 and $190.14.

Read Next: Meta Options Traders Bet On Stock Recovering Some Losses By Friday

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