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Is META in danger? Analyst says stock is ‘huge wave about to crash’

Is META in danger? Analyst says stock is 'huge wave about to crash'

Meta Platforms (NASDAQ: META), formerly known as Facebook, emerged as a standout stock market performer in 2023, largely driven by the surging advancements in the artificial intelligence (AI) sector. The company’s stock witnessed a remarkable ascent as it rode the waves of AI growth. 

However, over the past month, the rapid pace of its rally seems to have hit a pause, with the stock losing a portion of its recent gains during this period. In fact, the tech giant’s shares are facing a potential risk of a significant downturn, stock market researcher Jake Wujastyk warned on August 19.

Notably, Wujastyk says that the MACD indicator on META’s chart

“Looks like a huge wave about to crash.”

MACD indicator on META chart. Source: Jake Wujastyk

What does this mean?

MACD stands for Moving Average Convergence Divergence, which is a popular technical analysis (TA) tool used to analyze the momentum and trend strength of a stock.

In this context, Wujastyk is suggesting that the MACD indicator on Meta’s stock chart is displaying a significant and pronounced movement that resembles the shape of a wave that is about to crash. 

Put simply, the analyst’s statement implies that there could be a notable reversal or a noteworthy change in its upward movement, suggesting that a sharp downswing may be looming. 

However, it’s important to note that this assessment is based on a single technical indicator, meaning that there is no confirmation this scenario would materialize. 

META stock price analysis

At the time of writing, Meta’s shares were changing hands at $283.25, down 0.65% in the past  24 hours.

Over the past week, META fell by more than 6.3% and over 9.6% in the past 30 days, losing almost $75 billion in market cap during that period. 

META 1-month price chart. Source: Finbold

Still, Meta’s year-to-date gains remain strong at over 130%. 

Expert comments on META’s recent recline

The late retreat in META looks like “somewhat of a mean reversion” considering the stock’s bullish run this year, said Matt Stucky, senior portfolio manager for equities at Northwestern Mutual Wealth Management.

“When the overall market pulls back, you start to see some of the winners mean-revert more aggressively.”

– Stucky added.

Meanwhile, other major tech stocks have also entered correction territory, with the likes of Tesla (NASDAQ: TSLA), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) all witnessing declines from recent peaks.

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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

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