The social media space in general has been doing well, but Snap has been leading the way.
Now investors want to know if the stock can continue its march higher after Snap reports its quarterly results. If it can, new all-time highs may be on the table. To set a new record high won’t take much, either.
Snap hit a high of $29.08 on Monday, which came within spitting distance of its all-time high at $29.44. In a somewhat painful realization, that mark was hit in just the stock’s second day of trading in March 2017.
Snap has been a quiet but steady gainer over the past two months. However, this name can make big moves in both directions once volatility picks up.
Highlighted above is the zoomed-out effect, with the weekly chart. Below is the zoomed-in look on the daily. As you can see on the weekly chart, the stock is not immune to large moves, dropping down to $8 in March.
Now trading north of $28, bulls are hopefully Snap can clear the current all-time high at $29.44 and rally up toward $30 and beyond. If it can, it puts the two-times range extension at $31.62 (as measured from the March low to the preceding 2020 high).
Above that puts the 261.8% extension in play near $39, although that's a long ways off at this point.
That’s the upside, but what about the downside?
I want to see Snap stock hold the $26.50 mark on a dip. There it finds the 20-day moving average and uptrend support (blue line), but more importantly, this mark highlights prior resistance from July that turned into support in October.
Snap stock began trading in a very tight range through the first half of October, refusing to budge below this mark. While that’s about 7.5% below current levels, a truly bearish reaction could send Snap below this zone.
Although that would be disappointing, so long as shares hold the 10-week moving average currently near $25.61, the stock would still display healthy price action.
Below that level and the 50-day moving average will be in play near $24.25, followed by a potential dip to the $21 zone.