Some of the biggest names in the market have stayed above their 200-day moving averages for an unusually long time. But after months — or even years — without a real test of this key level, they’re finally starting to come back down.
Stocks like Meta (META), Costco (COST) and Netflix (NFLX) have avoided touching their 200-day moving averages for hundreds of trading sessions.
Now, with the market showing major signs of stress, the question is: Do these pullbacks present a buying opportunity, or is there more downside ahead?
Meta (META): A Long-Overdue Test
Meta has been on an unstoppable run, rallying more than 700% off its 2022 lows. But it has now gone 524 trading sessions without touching its 200-day moving average — an extreme stretch for any stock.
When a stock moves this far from a key technical level, the eventual retest tends to be meaningful. A bounce is possible, but a clean break below it would open the door for a much deeper correction.
For short-term traders, a move down to the 200-day moving average could offer a tradeable bounce. But for long-term investors, the better entry might come lower, especially if the stock sees a more drawn-out pullback.
Costco (COST): A High Bar Count Signals Risk
Costco has been a steady winner, with strong earnings and a business model that has outperformed most of Consumer Staples (XLP). But with 445 trading sessions since its last touch of the 200-day moving average, it may finally be due for a test.
High bar counts like this are rare, and when a stock has gone this long without a reset, history suggests it eventually comes back down. The 200-day moving average is the first major level to watch, but if it doesn’t hold, Costco could have further to fall.
Long-term investors might see a pullback as a chance to add shares, but chasing the stock without waiting for a real correction could be risky.
Netflix (NFLX): A Post-Earnings Reality Check
Netflix has been another big winner, benefiting from its crackdown on password sharing and expansion into ad-supported streaming. But the stock has now gone 345 trading sessions without touching its 200-day moving average, and the recent pullback suggests that streak may be ending soon.
One red flag is how Netflix has reacted to earnings. Even after reporting strong numbers, the stock has sold off — a sign that investors may have already priced in the good news.
If Netflix drops to its 200-day moving average, it could be an opportunity for traders looking for a bounce. But a break below that level could signal that the stock has further downside before it finds real support.
The Bottom Line: Be Patient
A stock hitting its 200-day moving average after an extended run doesn’t automatically make it a buy. Sometimes, it’s just the first step in a longer decline.
Meta, Costco and Netflix are all strong companies, but they’ve been stretched for too long. While short-term bounces are possible, long-term investors should be patient and wait for confirmation before stepping in.
The best buying opportunities come when fear sets in — not just when a stock touches a moving average, but when the market gives a real signal that the selling is done.
I’ll see you in the markets.
Chris Pulver
Chris Pulver Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
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