The metaverse is not over yet… Gilles Leclerc offers you a trading plan today on one of the most important players in the sector!
Today I come back to the excellent article published last Friday by my colleague Eric Lewin, about the immense potential of the Metaverse.[ Article de fond que vous pourrez retrouver ici, NDLR]†
A sentence I borrow from this article that sums up the situation well: “If the concept of the Metaverse may seem far from reality to us, large companies seem to see huge potential in it …”
One of the major players in the sector is, of course, Metaplatforms – back in the days Facebook (US30303M1027 – FB)†
And since Meta Platforms is just testing a major support – and technical rebound signals are starting to show up – I am offering you a trading plan for this value at the beginning of the week.
For starters, I recommend taking a step back with a long-term chart.
There’s nothing magical about this kind of framing: it’s just an exercise to highlight the levels or the “big hands”, i.e. the big investment banks and other institutions that take a position to buy/sell/lighten or sell their positions. strengthen . So these are “key” levels to intervene at.
Two media are currently being tested
As for Meta Platforms, two of these “key” supports are currently being tested.
- The first is the green horizontal rectangle (labeled “SH // 50%”). A very extensive graphical level (see white arrows).
- The second is simply the support of the bullish channel (see green arrows) which has also already proven its relevance.
And since the two supports meet at the same level with the same timing (yellow dot) – we can start building a trading plan to immediately rebound if the supports do the job.
Waiting for a positive technical signal
If a rebound is to be triggered in the support zone of the monthly view, we must (and quite logically) first show a positive technical signal on a lower timeframe.
Usually I look for a trigger on a day view, but this week Meta Platforms will release its Q1 earnings after trade on Wednesday night.
Hence the unusual choice for the weekly view below.
Specifically, following a signal confirmed on Tuesday or Wednesday on a daily display… can be easily disproved if the results happen to be poorly received by the market.
So we go to weekly, and as of Thursday, if the MACD trend indicator goes up (yellow dot) while the META action is still trading within the lower support zone limit (we will say above is $160 wide), then we will can bring up a trade to initially aim for a return of €240 (O1).
O1 is a graphical resistor AND an amplitude carrier (the vertical blue arrows). This should leave a potential of about fifteen percent.
Note that the fundamental analysts following the stock are buying with an average price target of $306. Which corresponds to a return to 02 (another amplitude report and another graphical resistance). So that would be a potential of 65% – which seems very ambitious to me personally in the short term.
We will therefore try to “insure” by aiming modestly and initially 01† I’ll get back to you when 01 is approached to update this trading plan and see if we can push it to 02 (or not!)
Keep in mind that taking a position on Meta Platforms consists of taking a counter-trend position… of the “catch a falling knife” type (up more than 45% since the start of the year). This is ONLY playable if the blade lands on a large, long-lasting support zone (which it is); and whether we have at least the validation of a positive technical signal (which we expect in the weekly view). And lastly, probably most importantly, managing risk with a short stop absolutely must be set (here below $160)†
PS: beware, this week will be publishing a torrent of American “tech” heavyweights. In this case, Meta Platforms, Apple, Microsoft, Alphabet, Amazon, Intel, AMD, Qualcomm… just to name a few.
It can “wave” overnight, depending on the publications (which so far have been very satisfying for those who have already revealed their results).
Have a nice week everyone – and lots of trading!