Meta - Earnings special
Elliott Wave Analysis | Meta CMP: 587 | Dt - 29th Oct'24
Simple speak
Options premiums are suggesting an 8% move in Meta post earnings. This move is already factored in Option premiums. If you make a straddle then you will need a move of 8% either side to breakeven.
Looking at the Meta chart, its channel and our EW count, you can see the three possibilities if the results are good
Wave 5 target #1 acts as a resistance - 4% gain
Wave 5 target #2 acts as a resistance - 6.5% gain
Channel top acts as a resistance - 7.66% gain
However if the results are not as great then downside potential is significant as it will start an ABC correction. Given Meta’s history with such drops and the length of its run up since 2022, it is a very juicy proposition.
Bullish outcome has limited upside but the Bearish outcome has a massive upside. Risk-reward situation for a bullish outcome is not very attractive. It is attractive for a bearish outcome but given overall strength of the Tech sector (Tesla, Netflix etc), its a risky proposition to bet on the downside.
Chart speak
Previous update - 29th Oct’24
Tl;dr - Our EW count for Meta is still on track. Per which, Meta, which had an extended Wave 3 impulse, is close to its Wave 5 termination. It appears an Ending Diagonal is playing out in Wave 5 and it should be followed by an A-B-C decline. It seems Meta Earnings or US Elections may end up being the catalyst.
Simple speak
A short term correction lies ahead for Meta. It should see the prices drop to $410 - $300 over the next few months. Expect the news and the narrative to become negative
Once this retracement is complete, it should see a dramatic rise as it will start its Wave 3 advance.
It seems the Ending Diagonal pattern is headed for a climax around Earnings or US Elections. There is a possibility that one of these events pushes the higher and stock out of the channel, before it falls dramatically.
Chart speak
Detailed analysis from the previous week below
Previous update - 14th Oct’24
Tl;dr - Meta, which had an extended Wave 3 impulse, is close to its Wave 5 termination. It appears an Ending Diagonal is playing out in Wave 5 and it should be followed by an A-B-C decline.
Key Highlights - EW Analysis by AlgoChirp
Wave 5 of an impluse that started in Sept 23 is close to its termination.
Target 1 & 2 for this 5th Wave are highlighted in the charts below
Wave 5 appears to be forming an Ending Diagonal. Internal count for this Diagonal are not super clear but it still seems like a high probability setup.
The sluggish nature of price movement is typical of a Wave 5 advance.
Alternate count - At this pt there is no strong alternate wave count. If RSI breaks the weekly trendline convincingly then we will need to relook at this count.
Chart #1 - Weekly
Chart #2 - Daily
Analyst Rating vs EW count
Long Term - In sync with EW count
Short Term - Not in sync with EW count
