It has not been a good year for Meta (META) — although the social-media giant is hardly alone.
Tech and growth stocks have come under the most pressure so far in 2022, as a bear market continues to roil equities.
When we look at Meta, the shares are down 62% in 2022 and 67% from their all-time high.
To ponder where the bottom is for Meta stock, we need to look at prior bottoms.
Down 67% from the high is Meta stock’s worst drought since it went public. It suffered a 61% decline in 2012 shortly after the IPO, then largely enjoyed the next five years until a ~44% correction in 2018 and a 38.5% correction in 2020.
It’s now trading below its covid low of $137.10 and into a key zone of the past several years. This zone encompasses $123 to $133 and marks where Meta stock bottomed in 2018 and where it broke out in 2017.
In short, we have a prior FAANG darling that’s lost two-thirds of its value and now trades at just 13 times earnings.
If this $123 to $133 area ultimately holds as support, the bulls will want to see it power up through the covid low and toward $150-plus.
On the downside, a break of this zone could usher in a test of the $95 to $100 area, although that would require a decline of roughly 75% from the high.
If we see that zone, the 78.6% retracement could be in play, as measured from the all-time high down to the all-time low.
This feels like a bit of an extreme view and is not necessarily something that I’m expecting.
But with Meta stock already trading in a key area, the bulls need to see the stock make a stand here. A break lower may not usher in $100, but it would firmly entrench the stock in no man’s land for the time being.