I’ve been a big campaigner for buying the dip lately. It’s my simple advice for dealing with any Fed volatility…And out of all sectors, I love buying the dip in small caps in 2022.But that doesn’t mean every stock is a buy-the-dip candidate.One stock just wiped out multiple years’ worth of gains in minutes, after an earnings report Wall Street found disappointing.“Dip” almost isn’t the word for what happened… More like “dump.”That stock is Meta Platforms (FB), better known as Facebook. And today, I want to see if this monster dip is worth buying…

Worst… Earnings Report… Ever

The company reported earnings after the close yesterday and missed analyst expectations.The big line item is that daily active users were down slightly, making it the first decline in users on record.Facebook blames competition from TikTok and other social media platforms. But this decline could mean its time in the spotlight is coming to an end.Add to that the lower revenue guidance and… BAM. Just like that the stock loses over 20% in value overnight.The stock has almost entirely given up its post-pandemic gains.From the highs before the pandemic in 2020, Facebook shares are now up just about 10%. (I’m using $243 as my spot price on the stock.)

Turn Your Images On

(Click here to view larger image.)

That brings the stock’s overall decline from its September peak to -35%.After the beatdown, everyone wants to know if they should buy the dip in Facebook.My short answer… no.I’m not a huge fan of Facebook, even after this massive drop. The company is struggling with its rebranding to Meta Platforms, which I admitted was too early when I added the stock to my Tank It list back in December.But now maybe it was more telling than we thought…

“Metaverse” + Declining Users = Stay Far Away

I think Facebook’s “Meta” rebranding has done far more harm than good so far.The rebranding comes as Facebook knows their main social media platform, which derives their revenues and is the heart of the company, is set to slow.To keep some hype and momentum around the stock, they are working to rebrand with Meta and drive consumers to the “metaverse.”It just hasn’t happened yet, and I believe we will see the stock head lower from here before it creates a new uptrend. Shares may get a short-term bounce. But don’t expect it to carry the stock back to new highs any time soon.There are MUCH better stocks to be buying during this dip than Facebook.I’ve talked about small caps outperforming in 2022. Plenty of those are beaten down and primed for a huge move this year.Almost any of those stocks would easily top Facebook’s performance.I’ll leave you with a little nugget of wisdom I come back to whenever I’m looking at stocks that have fallen.If you ever find yourself stuck thinking, “heck, can it get any worse?”The answer will always be yes. It can get worse and it usually does.Regards,Chad Shoop, CMTEditor, Quick Hit Profits

Chart of the Day:All Signs Point to Energy Outperforming

Turn Your Images On

(Click here to view larger image.)

The energy trade continues to defy expectations…Amid the bloodbath we’ve seen the past month, energy stocks have been a serious outlier. As Chad pointed out yesterday, following his call at the beginning of January would’ve had you riding a 10% move higher in the Energy Select Sector ETF (XLE) in January, even as the S&P 500 fell 6% (at one point as low as 12%).And there’s no sign of this trade slowing down for the long-term. XLE just broke above a key rising resistance line, while putting in new highs on the RSI.The momentum does seem to be waning a bit on the MACD. But if anything, I would just expect XLE to consolidate a bit before continuing even higher.By the way, if you listened to my guidance a few weeks back about selling energy, you probably did pretty well. That Chart of the Day on January 18 marked the beginning of a 9% drawdown in the ETF’s price.You might be shaking your fist at me for not telling you to get back in… And, fair enough. But I like to keep these Charts of the Day varied, so you get a well-rounded view of the charts I’m seeing.For now, you want to be bullish on energy. I think it’ll be an outperformer this year — and for more long-term investors, throughout the rest of this decade too.Regards,Mike MersonManaging Editor, True Options Masters