Along with Monday's decent price action, Snap has a great-looking chart ahead of the print. Of course, earnings have the potential to enhance this bullish outlook and send a wrecking ball into the charts.
Despite some volatility over the last month, social media stocks have been trading well lately.
For Snap’s part, the stock is hovering at its highest level in over three years, while shares are up more than 200% from the coronavirus low in March. Let’s look at the charts ahead of the report.
Trading Snap Stock
Snap stock was obliterated in the first-quarter selloff, as shares dove from $20 in January to $8 in March. However, the rally from the lows has been robust.
The gap-up in April helped give Snap stock the momentum it needed to break out over $20. Since then, shares have surged, almost hitting the 161.8% extension up at $27.09 earlier this month.
As the 10-day and 20-day moving averages continue to buoy the stock, Snap bulls continue to be rewarded for buying the dip. Now the big test comes on earnings.
If the reaction is bullish, look for a rotation up through this month’s high at $26.76, followed by the 161.8% extension I just referenced. Above that and things will get interesting.
Specifically, my additional upside levels include the current all-time high at $29.44 — which came on the opening week of the IPO in 2017 — followed by the two-times range extension at $31.62.
On the downside, keep an eye on $23. Below this mark not only thrusts Snap stock below the 10-day and 20-day moving averages, but also puts a weekly rotation lower in play.
While Snap could find its footing even after a dip below $23, it opens up the door to a test of the 50-day moving average and a retest of the $20 breakout level.