Yesterday, after the close of the main trading session, social media giant META reported its second-quarter results, significantly exceeding analysts' expectations:

→ Earnings per share: actual = $5.16, forecast = $4.72;
→ Revenue: actual = $39.07 billion, forecast = $38.26 billion;
→ Daily active users increased by 7% year-on-year to 3.3 billion;
→ Ad impressions grew by 10%, and ad prices increased by an average of 10%.

CEO Mark Zuckerberg stated that the integration of AI across all platforms, including Instagram, WhatsApp, and Facebook, is driving engagement growth.

Investors were undeterred by the fact that Reality Labs, the division focused on metaverse development, reported a loss of around $4.5 billion for the second quarter, bringing its total loss since its inception in 2020 to $50 billion.

As a result, during after-hours trading, META’s share price rose by 7%, surpassing the psychological $500 level.

What Could Happen Next?

On 19 July, our analysis of META’s chart identified an ascending channel (shown in blue) and highlighted the importance of support at the $455 level.

Since then, the share price attempted to break this level on 25 July, but this led to a surge in demand, with META’s price rising sharply and forming a candle with a long lower wick.

In pre-market trading today, META's price is above $505, and the main session is likely to open around these levels.

Technical analysis of META’s daily chart shows that:
→ The price is confidently returning within the channel boundaries;
→ Despite bearish signals from the July highs, strong fundamental data is helping bulls overcome these signals;
→ A broad bullish gap is likely to form on the chart, potentially serving as a support zone and aiding price movement within the current ascending channel.

According to TipRanks, Wall Street analysts have a 12-month target price for META of $549, suggesting potential growth towards the median line of the channel.

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