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Snap Earnings Preview: Here Are the Must-Know Chart Levels

Snap has been a strong performer but the stock has struggled lately. Here are the key levels to know after it reports earnings.

Social media stocks are about to get a glimpse at the earnings landscape when Snap  (SNAP) - Get Snap Inc. Class A Report reports earnings.

Due up after the close of trading on Thursday, Snap will shed some light on whether the industry has maintained momentum in digital advertisements.

Investors in Twitter  (TWTR) - Get Twitter Inc. Report, Pinterest  (PINS) - Get Pinterest Inc. Class A Report and Facebook  (FB) - Get Meta Platforms Inc. Report all will be focused on Snap’s results.

The company’s recent focus on e-commerce and AR have given analysts optimism on Snap's growth potential. However, investors will want to hear that its current top-line growth remains in tune with expectations.

Down about 20% from its highs, Snap has investors wondering if this is a buying opportunity. After all, Snap’s prior earnings report gave the stock a nice jolt higher. Perhaps this one can too.

While Pinterest and others have been doing well from a business perspective, the stocks have been struggling lately. Let’s see if that can turn around this quarter.

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Trading Snap

Daily chart of Snap stock.

Daily chart of Snap stock.

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In February, Snap topped a $100 billion market cap. However, shares quickly faded lower as tech stocks came under selling pressure.

In the case of Snap, the stock suffered a peak-to-trough decline of roughly 35%. Despite bouncing from those lows, it’s clear investors are still looking for direction.

Who knows, perhaps Snaps is setting up for a multi-month or multi-quarter consolidation - sort of like what we saw with FAANG and other mega-cap tech stocks.

From here, we’re at an interesting spot with Snap stock. It’s below some of its shorter-term moving averages, but still above the longer-term moving averages.

On the upside, we obviously need to see Snap stock clear the 50-day and 10-day moving averages near $60. However, $65 has been the tough spot. If Snap can clear $65, the highs near $73.50 could be in play.

A bearish reaction that sends the stock below the 100-day moving average could have lower prices could be on the way.

In terms of a larger dip, I would love to see Snap test down into the $48 to $50 zone. That would require a 14% to 17% decline, but it would put Snap into several support measures.

They include the weekly VWAP measure, the backside of prior downtrend resistance (blue line) and range support near $48. Again, that would require quite the dip, but if it comes to fruition, it provides a solid buying opportunity - at least at the moment.