Meta Has Given Back All of Its Muse Advance. Shares Could Face More Pressure Ahead. -- Barrons.com

By Doug Busch

Five years after Mark Zuckerberg renamed Facebook, Meta Platforms, reflecting the company's bet on an immersive metaverse, that vision has largely been shelved. Management has shifted resources toward AI glasses and its new Muse agent.

The name Meta remains, but the original strategy that justified it has been quietly abandoned.

The stock resides within the worst-performing major S&P sector in 2026. The State Street Communication Services Select Sector SPDR Fund anchors the bottom of the benchmark rankings across all core time frames -- trailing over the past week, month, and year to date with a 12% decline. sign of abating. That's partly because sector heavyweight Alphabet, the ETF's second-largest component , is trading sharply lower in Thursday trading following an uninspiring earnings reception.

This weakness is amplified by persistent technical deterioration across key digital media and interactive entertainment peers. Take-Two Interactive Software has retreated 27% from its 52-week peak, definitively breaking under a bear flag pivot at the very round $200 number on Wednesday. Concurrently, AppLovin remains in a deep drawdown, trading more than 60% beneath its annual peak established last December. Netflix continues to face sustained selling, sitting over 50% below its July highs with losses in six of the past eight weeks, including an additional 6% slide week-to-date.

Against this deteriorating backdrop, a look at Meta Platforms across the daily and weekly time frames reveals where the stock could be headed next.

Looking at the daily chart, the ratio chart against the XLC has broken decisively below its multiweek uptrend following an aggressive September advance. On an absolute price basis, the stock has accelerated rapidly, driving META down over 20% in the past month. The stock now sits 21% below its 52-week peak, marked by a punishing streak of declines in nine of the last 10 trading sessions on expanding, above-average daily volume.

This high-volume liquidation has completely closed the September 8 gap, when shares gapped up 7% following the Muse AI platform announcement to complete a bullish island reversal. Any attempt to stabilize has met selling pressure. After breaking below a bull flag in mid-October, the stock failed to establish downside traction despite consecutive doji candles printed on Oct. 20 and 21.

Throughout 2026, it has traded within a broad band of $525 to $750, with key turning points defined by a Jan. 29 doji near the top and a March 30 bullish harami cross near support. With intermediate momentum rolling over and distribution volume swelling, the setup points toward a potential mean-reversion move toward the former support floor. I think this stock will travel toward the $540 area sometime in the first quarter of 2027, a 14% decline from current prices.

Meta Platforms was trading around $630 Thursday.

Turning to the weekly chart, multiyear momentum has flashed a prominent cautionary signal following bearish RSI divergence that developed across 2025. While price printed successively higher highs across the first and second halves of that year, the weekly Relative Strength Index formed lower highs, failing to confirm underlying accumulation power. Since resolving a bull flag in August 2025, price action has essentially traded within a wide consolidation corridor bounded between $500-$800.

The perimeter of this trading channel has been rigorously tested. The overhead supply ceiling near $800 triggered multiple distribution signatures. That includes a bearish evening star in February 2025 followed by a heavy exhaustion cluster of spinning tops, weekly dojis, and bearish engulfing candles between August and October 2025. Conversely, the $500 structural floor has repeatedly attracted aggressive responsive buyers, underscored by consecutive bullish piercing line candles in April 2025 and a bullish harami in April 2026. On this longer time frame one could argue that the stock could head toward $500 which would align roughly with its rising 200-week simple moving average.

Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

October 29, 2026 13:47 ET (17:47 GMT)