ZINGER KEY POINTS:

• Social media and tech juggernaut Meta Platforms is embracing the brave new world in automation.
• Despite the relevance, execution uncertainties help fuel speculation in Direxion's METU and METD ETFs.

The big day comes on Jan. 28 after the closing bell. Wall Street analysts will be looking for earnings per share of $8.18 on revenue of $58.41 billion. In the year-ago quarter, the social media giant posted EPS of $8.02 on sales of $48.38 billion, beating out the consensus expectations of $6.76 and $46.99 billion, respectively.

If past performance is any indication, Meta Platforms should be able to deliver another solid outing. Indeed, the last time the company missed on either the top or bottom line was back in February 2023.

Most recently, a flurry of positive analyst coverage has helped bolster sentiment in META stock. Even better, the fundamentals — including Meta's dominant digital advertising machine and artificial intelligence as a growth catalyst — underscore the possibility that the market value may ascend over the next several months.

For instance, the Feb. 20 expiration date features elevated put volatility relative to calls in the upper strike price boundaries. Essentially, this dynamic suggests that institutional investors are short on their downside exposure to META stock. In other words, while these players may own the security, they're placing protective bets against unexpected downside.

Overall, sophisticated market participants are still engaging META stock rather than outright selling the security; that's certainly a positive for the bulls. However, the exposure to the upside is not "free" in a volatility sense. Instead, the bullish expression is nuanced and downside protected.

To make a long story short, the overall narrative is bullish for META stock. However, there are more than enough kinks in the armor that have caused professional traders to pay for volatility insurance. As such, this ambiguity leaves open the possibility of downside movements.

Primarily, the core purpose of these Direxion ETFs is to facilitate a convenient mechanism for speculation. Generally, those interested in leveraged or inverse positions must engage the options market, which brings with it unique complexities. With Direxion's specialized funds, however, traders can buy the underlying units much like any other publicly traded security. Therefore, the learning curve is mitigated.

Still, prospective participants must be aware of the risks. First, adding leverage or incorporating an inverse profile on an underlying security tends to amplify volatility risks. Second, Direxion ETFs are designed for exposure lasting no longer than one trading session. Going beyond this recommended period may expose unitholders to positional decay due to the daily compounding effect.

The METU ETF: While the METU ETF has gotten off to a slow start to the new year, the bull fund has gained nearly 22% in the past five sessions.

• Most prominently, METU appears to be working its way out of a double-bottom formation that materialized between late November through last week.
• Significantly, the bull fund moved above its 50-day moving average. More than likely, the bulls have set their eyes on the 200 DMA, which stands about 12% from the current price.

The METD ETF: On the other end of the scale, the METD ETF started off hot but is currently down 2% since the beginning of January.

• In some respects, METD may be a victim of a double-top-like formation that may have materialized between November through last week.
• Critically, the bear fund slipped below the 50 DMA recently and is struggling to maintain its posture at the 200 DMA.

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