META Approaching Crucial Resistance! Trade Setups for Jan 23
Analysis:
Meta Platforms (META) has seen a strong upward move and is now trading close to a critical resistance zone near $650. The price action and gamma levels suggest a potential continuation or retracement scenario.
Technical Observations:
1. Trend Analysis:
* META is in a clear uptrend, supported by higher highs and higher lows.
* The price is forming a rising wedge, indicating potential bullish momentum but also a risk of reversal if key levels are breached.
2. Key Levels:
* Resistance: $652 (recent high and 3rd call wall), $700 (highest GEX/call resistance).
* Support: $633.43 (immediate support), $603.65 (major support level and put gamma wall), $580 (next key level).
3. Indicators:
* MACD: Currently showing slight bearish divergence, signaling potential short-term weakness.
* Stochastic RSI: Approaching overbought territory, suggesting caution for longs.
4. Volume Profile:
* Increased buying volume during the recent rally indicates strong bullish interest but may slow as META nears resistance.
GEX Insights:
1. Call Walls:
* Key Call Levels: $652 (3rd call wall) and $700 (highest positive GEX and gamma resistance). Breaching $652 could open the path to $700.
2. Put Walls:
* Key Put Levels: $603.65 (strong support zone) and $580 (next major support).
3. IVR and Options Activity:
* IVR: 43.5 (slightly above average volatility).
* Options Flow: Call volume dominates with a 29.9% skew, reinforcing bullish sentiment.
Trade Scenarios:
Bullish Scenario:
* Entry: Break above $652 with strong volume.
* Target: $680 (intermediate resistance) and $700 (long-term target).
* Stop-Loss: Below $640 to limit downside risk.
Bearish Scenario:
* Entry: Rejection at $650-$652.
* Target: $633.43 (immediate support) and $603.65 (key support).
* Stop-Loss: Above $655 to minimize losses.
Actionable Suggestions:
* Closely watch price action around $650-$652. A breakout could accelerate upward momentum, while rejection signals a pullback.
* Monitor options flow for shifts in sentiment, particularly near $652 and $700.
* Be cautious of overbought signals from the Stochastic RSI when considering long positions.
Disclaimer: This analysis is for educational purposes only and does not constitute financial advice. Always do your own research and manage your risk before trading.