META - falling wedge pattern (bullish)After a strong 28% gap post earnings on 2nd Feb, META has now given up about half its post-gap gain. However, its longer term bullish picture remains intact if we look at the following factors:
1. Stock is still trading above both its 20 and 200 day moving average (the latter of which is beginning to flatten out, a precursor to turning up)
2. A falling wedge pattern is forming (potentially bullish)
3. Bullish divergence forming between price and RSI (*see Note below)
A break out of this wedge could be an opportunity to long again if one has taken profit earlier or has gotten stopped out as stock went into this steep retracement. I would put initial stop loss slightly below the most recent pivot low (which will be the candle just prior to the wedge breakout).
However bear in the mind the stock's momentum could be slower for now until the next catalyst appear.
*Note that while a bullish divergence could materialize into a short term bounce lasting about 2 to 3 candles, it does not translate into a longer term trend change on it's own.
Disclaimer: Just my 2 cents and not a trade advice. Kindly do your own due diligence and trade according to your own risk tolerance and don't forget that money management is important! Take care and Good Luck!
