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