Snap Inc. (SNAP) is the Stock of the Day at Real Money here on Tuesday as the social media company is slated to release its latest quarterly results after the market close. Snap was higher at the open on the heels of a fundamental upgrade by a sell side firm. Let's check the charts and indicators to see how things looked before this recommendation.
In this daily bar chart of SNAP, below, we can see that prices tripled from their late December low. Prices are above the rising 50-day moving average line as well as the bullish 200-day line. In early April we can see the 50-day line cross above the 200-day line for what is commonly called a golden cross buy signal. The trading volume shows an increase from early February and the On-Balance-Volume (OBV) line shows a rise from late January to the middle of July. The Moving Average Convergence Divergence (MACD) oscillator has stayed above the zero line since late January, but in late June the oscillator crossed to the downside for a take profits sell signal.
In this weekly bar chart of SNAP, below, we can see a mixed picture. Prices suffered a large decline from $28 down to $5 before the recovery this year. SNAP is above the rising 40-week moving average line and the weekly OBV line has improved this year. The MACD oscillator is narrowing toward a possible take profits sell signal.
In this Point and Figure chart of SNAP, below, we can see a possible downside price target of $12.74.
Bottom line strategy: A buy recommendation after a stock has rallied threefold has me questioning the timing. With a mixed set of indicators it looks like SNAP could correct down toward $12 before renewed gains. Have patience before looking to become a buyer.