| | | | AMZN and AAPL Blast Off?
First, don’t miss today’s Daily Chart Setup trade idea down lower in this newsletter.
Apple's China sales slump gets rescued by its booming services business, Meanwhile, Amazon soars to record highs on explosive AWS growth and massive AI investments…
A tale of two tech giants navigating very different paths to success. Let’s discuss that, and…
Come join me as we dive in and see what’s moving!
Plus, as always, we have stocks popping and dropping so come find out what is moving this morning as I look for stocks and do some live premarket analysis on SPX, SPY, NDX, QQQ, Russell, IWM and other stocks that are potential plays for the day.
— — —
Meta's $16B Tax Bill Surprise and the Buying Opportunity It Created
Meta Platforms (META) is doing what Facebook does best — creating drama where there shouldn't be any.
Here's what happened: The company delivered a pretty solid earnings report.
Revenue was up, user numbers climbed higher, and even their Reality Labs division — you know, the one burning cash on the metaverse — actually beat expectations.
So naturally, the stock got punched in the face.
Why? Because Meta got slapped with a one-time non-cash tax charge of $16 Billion — yes, with a big B — apparently related to tax laws. Now, even though it's a one-time thing and doesn't affect cash flow, it made their earnings per share look absolutely terrible.
And the market, well, it loves a good panic.
But here's the thing — people are still scrolling through Instagram, still jumping on Facebook, and the company's still printing money. The underlying business hasn't changed. This is classic Wall Street overreaction to an accounting footnote.
The Technical Picture Shows Classic Three-Wave Correction
From a technical standpoint, this looks like a very aggressive three-wave correction pattern — an aggressive A wave followed by an aggressive B wave, and now potentially completing the C wave.
Here's what makes this interesting…
We're down in the vicinity of a potential bottom if this is a three-wave structure that's complete. If you've been shorting Meta expecting a bigger collapse, this is exactly the zone where you need to be careful.
These waves have been so aggressive they don't even show clear subwave patterns — which is typical when selling pressure hits hard and fast.
Could it go deeper? Sure.
We could see a move all the way down to the $600 level, or even find support around $580. That zone could actually set up an even bigger bounce opportunity if we get that final flush lower.
But if we break below $580, we'd likely see a trip down toward the $540 area.
The Buy-the-Dip Opportunity — If You Can Handle the Drama
This is a classic buy-the-dip scenario. The underlying business is strong, but the stock is trading below support levels. You might want to wait until Meta actually starts turning higher before jumping in, but the setup is there.
The key question is whether you have the stomach for Meta's particular brand of volatility. Because if there's one constant with this company, it's that there's always some drama.
One quarter it's Reality Labs burning billions... Another quarter it's regulatory concerns... This time it's a $16 billion tax surprise from years past.
But that's also what creates opportunity. When a fundamentally sound company gets hammered over something that doesn't affect its actual cash-generating ability, smart traders pay attention. The panic creates the discount.
Just make sure you're watching those support levels carefully. This isn't a “blindly jump in and hope” situation. It's a “wait for confirmation, watch the technicals, and position accordingly” type of trade.
Now be sure to join me live at 9:15 a.m. ET for “Morning Monster,” my market-open livestream on YouTube!
| | | | |
|
|
0 Response to "Meta's $16B Tax Bill Surprise and the Buying Opportunity It Created"
Post a Comment