The Bozeman, Mont., company reported better-than-expected earnings at a time when the market is struggling to put together some constructive upside action.
Helping give an even bigger boost of optimism was the company’s strong guidance for next quarter.
That comes after Salesforce reported earnings on Tuesday evening and fell hard on Wednesday after disappointing guidance.
For Snowflake, let’s see if the stock can find some more momentum. Before the past few days of action, this stock was trading pretty well.
Can it return to form?
Trading Snowflake Stock
Snowflake stock was enjoying one heck of a ride at the start of the fourth quarter.
The shares came into the quarter near the lows, as they were riding the 50-day moving average and retesting support near $290.
From there, the stock ripped off seven straight weekly gains, topping $400 in mid-November. But it was clearly struggling with this area.
This week has been difficult, as Snowflake stock fell 19% from Monday’s high to Wednesday’s low, where it checked back to the 161.8% downside extension on its ABC correction.
Now it's back up through the 50-day and 10-week moving averages. These are vital measures to hold.
If Snowflake loses these — particularly the 50-day — then it’s possible to see lower prices. That starts with the 61.8% retracement for the entire range, then the post-earnings low at $328.61.
Below that puts the 21-week moving average on deck, potentially followed by the December low near $305.
On the upside, I want to see a push over the 21-day moving average and this week’s high at $378.11.
If we get that, then Snowflake stock likely has a date with $400-plus. However, it may very well need the Nasdaq to rally as well, and a bid in growth stocks wouldn’t hurt either.
Bulls are celebrating the move today, but they have to be careful. If the market remains under pressure, Snowflake may not be out the woods quite yet.