For the second time in the last last month, Bank Of America has thrown in the towel on mega-cap technology stocks.
Before the opening Monday, BofA downgraded Meta Platforms Inc (NASDAQ:META) from Buy to Neutral and lowered its price target from $195 to $150.
On Sept. 29, BofA downgraded Apple Inc. (NASDAQ:AAPL) from Buy to Neutral and lowered its price target from $185 to $160.
While it took investors a while to “buy the dip” in Apple following the downgrade, they are not waiting around in Monday’s session. The Meta price action makes it the PreMarket Prep Stock of the Day.
Meta's Volatile Week: During Meta's 13-month swoon from an all-time high of $384.33 (September 2021), the issue has seen several temporary rebounds. The most recent emanated from its 69-month low, which was made Oct. 13 at $122.53.
Over the next three sessions, it made a high for the rebound at $137.84 and posted the highest close for the rebound the day prior at $134.04.
The issue retreated from last Tuesday’s high but ended the week in the green by $3.25, or 2.6%.
Sell, Sell, Sell: Despite the buoyancy of the stock index futures in the premarket and off the opening Monday, aggressive traders were pounding the issue in premarket trading. The downward momentum continued into the first 45 minutes of the session.
In fact, the issue breached Friday’s low ($125,44), falling to $124.57. At this time, that is the second-lowest intraday low the issue has made during its extended decline.
The Market Structure Edge Take: Monday’s PreMarket Prep guest, Tim Quast, founder of Market Structure Edge, had a different take on Meta's recent price action.
In fact, he identified the decline as a potential “buy the dip” opportunity, according to his metrics — “rising demand” and “decreasing supply,” as explained in the clip below.
Buying The Dip: Since reaching its intraday low, Meta has caught a major bid.
As of 12:30 p.m. EST it has gone from over $5 in the red to over $1 in the green as it trades at the $131.50 area.
That is off its high for the session of $132.19.
META Moving Forward: With Meta due to report third-quarter earnings after the close on Wednesday, it can go anywhere from here.
Investors taking a long-term view and banking that the low for the move is in may want to focus on its recent low for an exit point if the reaction to the report is negative.
For investors who want the issue to prove more on the upside, a sustained move and closes above last week's closing high ($134.04) may indicate a longer-term bottom is in place.
