Meta Analysis: Navigating Corrections and Entry Points 25.01.03Hello, this is Greedy All-Day.
Today, we’ll be analyzing Meta Platforms (META) and exploring its technical structure, correction patterns, and potential entry points.
Weekly Chart Overview
Since its IPO in 2012, Meta has maintained a largely stable uptrend, excluding the significant correction from 2021 to 2022. Historical corrections from Meta’s highs have averaged around 35%, with the broader trend remaining bullish.
How Should We Approach Meta?
If you're a value investor, any price might be a good price. Over the years, Meta has demonstrated significant growth, with a nearly 400% increase between 2013 and its pre-2021 highs.
However, as technical analysts, we aim to optimize entry points during corrections to maximize returns. Let’s dive into the potential setups and risks.
Rising Wedge Pattern: A Sign of Potential Correction
The current chart indicates a rising wedge pattern that has been forming since April 2024, a period spanning nearly 10 months. Rising wedges are inherently bearish reversal patterns, often preceding corrections.
Key Levels: If the pattern breaks downward, Meta could decline toward the pattern’s origin between $442 and $414.
Historical Context: Past corrections for Meta have averaged around 20%, making such a drop well within reason.
Meta’s Unique Supply Zone Behavior
Unlike many stocks that rebound at the upper boundaries of supply zones, Meta has a tendency to dip into the middle of the supply zone before finding support and rebounding.
This behavior suggests that when preparing to enter during corrections, focusing on the midpoint of key supply zones could provide better opportunities for long-term gains.
Optimal Entry Points
1st Entry Zone: Rising Wedge Breakdown
Zone: $442–$414 (light blue box)
If the rising wedge breaks downward, the pattern’s origin offers a strong entry point for those waiting for a correction.
2nd Entry Zone: Historical Support Levels
Zone: $312–$280 (blue box)
Although traditional logic might suggest entering near the green box (upper boundary), Meta’s history of testing the middle of its supply zones during corrections justifies adjusting the range lower.
3rd Entry Zone: Deep Correction Scenario
Zone: $210
While unlikely in the near term, this level represents a potential re-test of historical lows should broader market conditions worsen significantly.
4th Entry Zone: Extreme Hypothetical
Zone: $137
If Meta’s current peak mirrors its 76% decline during its last significant correction, $137 would represent a theoretical target. While highly improbable, it’s worth noting for extreme long-term planning.
Signs of a Larger Correction
Corrections often begin when Meta fails to hold support at the weekly 60 EMA.
Historically, Meta has transitioned into long-term downtrends after repeatedly testing and failing at the 60 EMA.
Key Level: The current 60 EMA is at $491. If Meta fails to sustain above this level, it could signal the start of a deeper correction.
Conclusion
Meta remains a fundamentally strong company with significant growth potential, but the technical outlook suggests caution in the short to medium term:
For Value Investors: Entering at any price might work in the long term, but technical traders should prioritize corrections for optimal entry.
Rising Wedge Pattern: A breakdown could lead to a 20% correction, with potential targets in the $442–$414 range.
Key Levels to Watch: The weekly 60 EMA at $491 will be a critical level to gauge whether Meta enters a longer correction phase.
Optimal Entry Points: Look to accumulate between $312 and $280 or lower if the correction deepens.
Let’s approach the market strategically and position ourselves for long-term success. 🚀
