Snap Inc. (SNAP) reported their latest quarterly figures Friday morning and traders and investors are reacting to a "miss". Let's check out the charts and technical indicators.
In the daily bar chart of SNAP, below, we can see that the shares made a choppy top pattern back in late July to mid-October. Prices gapped lower in late October and started a decline into late January. The shares bounced in February and March but made lower highs as traders sold the rallies. SNAP is trading below the declining 50-day moving average line and the declining 200-day moving average line.
The On-Balance-Volume (OBV) line has been pointed down since September and tells me that sellers of SNAP have been more aggressive than buyers. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since October telling us that the trend strength is weak.
In the weekly Japanese candlestick chart of SNAP, below, we see a negative-looking picture. Prices are in a downtrend and trade below the declining 40-week moving average line. There are no clear signs of traders rejecting the lows.
The OBV line is pointed down and the MACD oscillator is a long way from the zero line. Not a bullish setup.
In this daily Point and Figure chart of SNAP, below, we can see that prices have reached a downside price target but that is no reason to purchase shares.
In this second Point and Figure chart of SNAP, below, we used weekly price data. Here the software suggests a target in the $24 area. A decline to $24 could precipitate still further declines.
Bottom-line strategy: The overall pattern of price movement and the direction of the indicators of SNAP do not favor the bulls. Avoid the long side of SNAP and wait for a proper bottom to develop. New lows for the move down are possible in the weeks ahead.
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