The Pitfalls of Extrapolation
Reflecting on Meta Platforms’ history, we are reminded of the stock’s remarkable journey and the dangers of projecting the recent past into the distant future. Back in September 2021, when the stock was soaring above $380 per share, few anticipated the subsequent 80% market value plunge over the following months. This historical context serves as a cautionary tale, highlighting the unpredictable nature of the market.
The Impulse Pattern: A Clue to Future Trends
An assessment of Meta Platforms’ daily chart unveils a striking surge from under $90, forming a nearly complete impulse pattern. The distinct labeling of (1)-(2)-(3)-(4)-(5) illustrates the five sub-waves within (1) and (3), showcasing wave (2) as a sideways correction and wave (4) as a sharp pullback, adhering to the principle of alternation.
Anticipating the Future Trajectory
If the wave count holds true, wave (5) is poised to reach a new all-time high in the vicinity of $600 per share in the near future. This milestone is anticipated to coincide with peak bullish sentiment among investors. However, from an Elliott Wave theory perspective, every impulse is followed by a three-wave correction. Therefore, a potential decline to the $300 per share support level might be a plausible scenario in Meta’s trajectory.