During Jim Cramer's Mad Money program Monday night he ranked the four big social media companies. Snap Inc. (SNAP) was included but Cramer said while the stock is up an astounding 103% from its lows, the company is still too inconsistent for it to rank any higher than dead last. That does not sound positive so let's take a look at the charts and indicators to see if they agree.
In the daily bar chart of SNAP, below, we can see that prices peaked in June/July of last year in the $12-$15 area and declined to a late December low around $5. Prices rebounded this year with a few price gaps and some heavy volume days but that strength is fading.
The 50-day moving average line is cresting or rolling over and the 200-day line is still declining. One of the heavy volume days in late April did not push prices up to a new high and is a "tell" of potential problems.
The daily On-Balance-Volume (OBV) line shows a peak in early April and now suggests that sellers are more aggressive. The Moving Average Convergence Divergence (MACD) oscillator is about to cross below the zero line for an outright sell signal.
In the weekly bar chart of SNAP, below, we can see can see a downtrend from early 2017. The slope of the 40-week moving average line is negative.
The weekly OBV line is most bearish the past two years and the weekly MACD oscillator is narrowing toward a possible bearish crossover.
In this Point and Figure chart of SNAP, below, we can see a downside price target.
Bottom-line strategy: Unless SNAP can rally and close strongly above $12.50, the most likely course is that prices will weaken further in the weeks ahead.