Meta's Charts Show Real World Trouble Ahead

Meta Platforms (META) just made a new 52-week high Tuesday. Should we like it? Share it? Or avoid it?  Let's check out the charts and indicators. 

In this daily bar chart of META, below, I can see that prices have been moving sideways to higher the past four to five months. Trading volume has been neutral and the On-Balance-Volume (OBV) line has moved sideways. META has been trading around the 50-day moving average line since August but is trading well above the rising 200-day moving average line. The 12-day price momentum study in the lower panel shows a high in November and a much lower high in December, even though prices made a higher-high. This is a bearish divergence and bears watching. 

In this weekly Japanese candlestick chart of META, below, I see a mixed to cautious picture. Prices have been moving higher for more than a year and trade above the rising 40-week moving average line. The weekly volume histogram shows us a pattern of declining volume the past year and that is disturbing to old chart watchers. The weekly OBV line has leveled off the past three months. The 12-week price momentum study shows lower highs from July to December even though prices made higher-highs. This is a large bearish divergence and it could be foreshadowing a correction to the downside. 

In this daily Point and Figure chart of META, below, I can see an upside price target in the $414 area. 

In this weekly Point and Figure chart of META, below, a price target in the $466 area is shown. 

Bottom line strategy: Bearish divergences are a "heads up" that a reversal could develop. It is imprecise as a timing tool, but a weekly close below $315 could precipitate further selling in META. 

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