Meta stock on the verge of a brutal bear cycle, warns expert

A trading expert has warned that Meta Platforms’ (NASDAQ: META) stock may be approaching the final stage before a deeper correction, based on technical indicators.

According to insights shared by TradingShot in a TradingView post on February 23, the stock has been forming lower highs since its August 2025 all-time high, signaling a loss of upside momentum.

Despite the pullback, price action remains supported by the weekly 100-period moving average (MA), a level that has so far prevented a sharper breakdown. The analyst views this zone, which often overlaps with the weekly 50–100 moving average range, as the last major support before the risk of a broader bear cycle increases.

At the same time, the monthly relative strength index has been in bearish divergence since July 2025, meaning momentum has weakened even as the price previously pushed higher.

A similar pattern emerged at the July 2018 peak, which preceded a steep decline. The analysis also showed comparable divergence ahead of the 2022 drawdown, highlighting the historical significance of the signal.

In past bear cycles, a break below the weekly 100 moving average led to declines toward the monthly 50 moving average, with losses of about 44% in 2018 and 40% in 2022 before support emerged. If that pattern repeats, the next key downside target is near $480, aligning with the monthly 50 moving average and the 0.236 Fibonacci retracement level, which also marked the December 2018 bottom.

However, the 2022 downturn extended beyond that level. Heavy metaverse-related capital spending pushed the stock below the monthly 50 moving average to test the monthly 100 moving average, with the decline reaching the 1.236 Fibonacci extension from the 2018 low.

If a potential 2026 bear cycle intensifies, particularly amid weaker macro conditions, Meta could slide toward the monthly 100 moving average and the 1.236 Fibonacci extension around $360, implying a roughly 55.8% drop, similar to the April 2022 drawdown.

Despite the technical warnings, Meta stock continues to be supported by strong fundamentals that could drive future price growth. 

For instance, on February 24, the company entered a multi-year partnership with Advanced Micro Devices (NASDAQ: AMD) to deploy up to 6 gigawatts of AMD Instinct GPUs for its AI infrastructure, in one of the largest chip supply deals to date.

The agreement includes shipments starting in the second half of 2026, featuring custom MI450-based GPUs and 6th Gen EPYC CPUs built on AMD’s Helios architecture.

However, Meta stock continues to show weakness. At the close of Tuesday’s session, META ended the day at $639.30, up 0.32% but down 3% year-to-date amid concerns over high capital spending.

In this context, Meta’s 2026 capital expenditure guidance stands at $115–$135 billion, focused primarily on AI data centers. Despite spending worries and concerns about a potential AI bubble, analysts remain bullish. On TipRanks, Meta Platforms has secured a ‘Strong Buy’ consensus.

Based on 43 analyst ratings, the stock carries 39 buy recommendations and four holds, with no sell ratings. The average 12-month price target stands at $864.62, implying roughly 35% upside from the latest price of $639.30.

Price targets range from a low of $700 to a high of $1,144, reflecting continued optimism about the company’s earnings trajectory and growth prospects despite recent market volatility.

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