Thursday's Market Minute: Meta Platforms (META) Surges +10% After Earnings Beat

Meta Platforms META is on the move after reporting earnings yesterday afternoon, with shares rising more than +10% in premarket trading. Revenue for the second quarter came in at $32B vs. the Street’s estimate of $31.06B, while EPS also beat at $2.98 vs. expectations for $2.92.

Ad revenue came in stronger than predicted at $31.5B against $30.43B, while CEO Mark Zuckerberg said the company continues to see strong engagement across its apps. However, the virtual reality division Reality Labs lost $3.74B, more than expected, and Meta expects losses to “increase meaningfully” due to ongoing product development efforts, according to a statement from the company. 

Even before the post-earnings blowout move, it was hard to find much wrong with Meta’s chart. The company was up almost 239% from the lows near 88 in November to yesterday’s close, with barely a pause during its ascent up. However, things were looking a little questionable heading into earnings, as Meta made a 9% dip off its recent intraday yearly highs but seemed to find some footing near the 21-day Exponential Moving Average and closed above this commonly followed indicator yesterday.

The Relative Strength Index (RSI) also showed waning momentum during the past week, with this indicator touching the 50 midline that separates bullish and bearish momentum. But none of this was particularly unusual for a company that’s had a big run heading into an event risk situation like earnings.

The question many traders likely are pondering now is where the move might stop. The yearly +1 Standard Deviation Channel comes in around 325 based on yesterday’s close, so this could be a key area to watch for a pause in the move. To the downside, the 21-day EMA comes in near 296 for potential support.

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