Shares of Snap Inc. ( SNAP) rallied Wednesday morning as traders welcomed an announcement that the messaging app company was reducing its workforce by 20% in a restructuring. Let's check out the charts and indicators to see if this news is enough to start a sustained rally.
In the daily bar chart of SNAP, below, we can see (look closely) that the shares have rallied early but have already pulled back intraday. SNAP is still trading below the weak 50-day moving average line.
The daily On-Balance-Volume (OBV) line shows a long decline the past 12 months telling us that sellers of SNAP have been more aggressive for many months now. The Moving Average Convergence Divergence (MACD) oscillator is below the zero line in sell territory. 
In the weekly Japanese candlestick chart of SNAP, below, we went back four years to get a better picture of longer-term support. The long-term picture of SNAP is not promising. Prices are in a prolonged decline below the negatively sloped 40-week moving average line.
The weekly OBV line is bearish and tells me that buyers have yet to turn aggressive. The MACD oscillator has crossed to a cover shorts buy signal but that is not much comfort.
In this daily Point and Figure chart of SNAP, below, we can see a potential price target in the $3 area.
Bottom-line strategy: I tend to view headcount reductions as two-sided events. Costs are being cut and that can help the bottom line but on the other hand it typically does not come from a position of strength. The charts of SNAP are still bearish, in my opinion, and I would avoid the long side of SNAP.
