Muse Ignites Meta’s Parabolic Rally, But I’m Taking the Other Side
Here’s the news that lit the fuse, how the chart looks and what to watch from here.
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Facebook reborn?
Kind of. Charter member of both FANG and the Mag 7, Meta Platforms (META) ran 11.3% on Monday. It’s early, but so far on Tuesday, the gains from that Monday session have held.
What was the news that acted as a catalyst on Monday, taking META and the stocks of major U.S CPU designers higher?
Let’s discuss.
The News
On Monday, according to Tower Data and cited by CNBC, Meta Platforms’ AI agent “Muse” was currently ahead of services thought to be more popular such as OpenAI’s ChatGPT, Polymarket and Kalshi on Apple’s iOS App Store in the category of free smartphone programs in the U.S. Muse was also ahead of rival AI apps, including Anthropic’s Claude and SpaceXAI’s Grok AI (I use both of these), as Meta’s own separate Meta AI app.
Muse apparently overtook ChatGPT as the leading iOS free app in the U.S. on the Friday ahead of this past weekend and had racked up 730,000 downloads over the five days after its September 8 launch. By Monday (yesterday), Muse had logged almost 2.6 million cumulative downloads since its debut. That comes out to an estimated 1.5 million downloads on iOS and about 1.1 million downloads on Android. Sensor Tower noted that Muse’s cumulative downloads eclipsed downloads of Claude and Grok over the same 13-day post-launch window (400,000 and 200,000 downloads, respectively), though ChatGPT still led with 3.1 million downloads over that time frame.
Additionally, also on Monday, Bloomberg News reported similar news. Meta’s Muse ranked as the No. 1 free app on both the U.S. iOS App Store and Google Play as of Monday. The app had been downloaded more than 902,000 times in its first six days after launching on September 8. Yes, the counts are different, but the news is close to being the same.
Wall Street
Since this news broke, I see six sell-side analysts rated at four stars or better (out of five) by TipRanks that have opined on META. Among the six, there are six “buy” or buy-equivalent ratings (four reiterations and two initiations).
There are five price target among the six, averaging $832.20 with a high of $875 (Brent Thill of Jefferies) and a low of $796 (Ken Gawrelski of Wells Fargo).
I last see the shares trading around a $745 handle.
The Chart
Readers will see that META had developed a giant Double Bottom pattern of bullish reversal stretching from last December into the present. That pattern had developed a $691 pivot which only a month ago, I had honestly thought was unrealistic. The stock broke out past that pivot Monday after experiencing crossovers of both its 50-day simple moving average and 200-day SMA by its 21-day exponential moving average. This very likely put the swing crowd in a feeding frenzy over the shares.
While I did not call this surge in META’s share price, I did inform readership in late August that should the stock take back its 50-day SMA, that it was a “buy.” That occurred on Friday, September 11 and the stock is up 25% since.
Moving on to the indicators that I rely upon, Relative Strength is now well beyond what most would consider to be technically overbought levels. The daily MACD looks a bit stretched as well.
Based on the $691 pivot, META’s price target could be as high as $830, in my book. That said, I would not be surprised if after this parabolic move, the shares make some kind of an attempt to consolidate or at least feel around for support.
I will be shorting a small amount of META shares after this piece goes to publication. My best-case scenario would be a retest of pivot. That said, I’d cover eagerly below $725.
At the time of publication, Guilfoyle had no positions in any securities mentioned.
