Meta Platforms (META) is setting up in a base after a strong second-quarter report got the stock started on a rebound. In fact, Meta stock is the closest to a buy point among the Magnificent Seven stocks.
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What Are The Magnificent Seven Stocks?
The Magnificent Seven led the 2023 rally and rose further during the first half of 2024. But mixed earnings and a sector rotation in July left tech leaders Alphabet (GOOGL), Microsoft (MSFT) and Amazon.com (AMZN) languishing below their 50-day moving averages. Tesla (TSLA) and Apple (AAPL) do not offer bases yet, while Nvidia (NVDA) remains 8% away from a proper buy point of 140.76.
By comparison, Meta stock is forming a cup without handle that has a depth of 18% and a buy point of 542.81. The relative strength line is picking up after the stock hit a low on July 25. Shares rallied after second-quarter results were announced and fought back from general market weakness in early August.
Meta Stock Rises After Second-Quarter Results
Meta’s results came in above views, while its outlook for the current quarter (sales of $39.8 billion at the midpoint) was largely in line with estimates. Growth in its advertising business helped the social media giant continue to chart out spending plans for AI capabilities on Facebook and Instagram.
IBD MarketSurge‘s chart tools show higher-than-average volume in the up weeks of Aug. 2 and Aug. 9. That indicates institutional buying, although its Accumulation/Distribution Rating, which tracks a longer 13-week period, suffers at D+.
Two points of caution: Shares are in a late-stage base, according to IBD MarketSurge. Earlier bases historically produce higher stock returns. Meta stock also has rallied over 45% year to date and quadrupled since it hit a low of 88.09 in November 2022. So it may be difficult for Meta stock to make another major price run.
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