- Facebook (FB) stock rallies over 5% on Wednesday to close at $232.
- Facebook Meta (FB) shares have collapsed following earnings but is the fall over?
- Facebook (FB) shows up as oversold on the RSI.
Facebook shares staged a strong bounce on Wednesday but the question for investors is whether this bounce is of the dead cat variety or something more sustainable. Basically, at this stage, you are betting on a transformation of the business. Facebook user growth looks to be stalling, certainly in the developed world. Facebook has monetized WhatsApp but more may be to come in this space. Instagram is facing competition from TikTok and other video media. Meta Platforms is gambling big on the metaverse, hence the rename and rebranding. So is it time to buy?
Facebook (FB) stock news
The earnings debacle is by now old news and well pored over. Slowing user growth and a huge investment in the metaverse saw a weak outlook which led to the largest market cap loss in history. Now Facebook (FB) has shown up on many stock screeners as oversold. The RSI hit 21 yesterday. We have mentioned this before but worth rehashing. Most technical analysts use 30 to indicate oversold, we prefer 20 to weed out false signals. But either way 21 is pretty close and strongly oversold. That helped to fuel yesterday’s strong rally in FB stock. But is it sustainable or are we witnessing the beginning of the end for Meta Platforms? The Wall Street analyst community is certainly sticking with the company. In the last seven days, only Loop capital markets have downgraded the stock as far as we can see. Many have lowered price targets but most investment banks have kept their buy rating on Facebook Meta (FB) stock. The current average price target is $332 from 44 Wall Street analysts, so well above the current price.
Facebook (FB) stock forecast
As mentioned then the RSI is significantly low and near our 20 oversold level. This has led to many stepping into Facebook (FB) already. We do note the old market adage that a first profit warning is usually not the last. While the recent earnings were not a profit warning per se they certainly felt like it. But yes nothing goes down in a straight line and it may be time to step in for a short-term bounce. RSI and MACD look overdone and this move has stopped short of support at $207. That is the key medium-term level to hold. $244 is the key medium-term resistance to get above.
Facebook (FB) chart, weekly
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