Snowflake Inc. (SNOW) is scheduled to report its fiscal first-quarter results after the close of trading here on Wednesday. In my May 4 review of the data platform provider, I wrote, "In my May 1 review of SNOW, I recommended that 'SNOW has been finding support around the $125 area and traders could probe the long side of SNOW on any shallow dip towards $135. Risk to $121 for now. The $178 area is my first price target.' Buy dips to $150 now."
Now that prices have reached my first price target of $178 and earnings are a few hours away, let's review Snowflake's charts and indicators again.
In this daily bar chart of SNOW, below, I can see that prices have broken the February highs but have not moved materially higher. SNOW trades above the slightly rising 200-day moving average line and above the rising 50-day line. The trading volume has not increased the past month, but the On-Balance-Volume (OBV) line has moved upward the past eight weeks and implies that buyers of SNOW are more aggressive than sellers. The Moving Average Convergence Divergence (MACD) oscillator is above the zero line but narrowing, which tells us the strength of the advance is fading.
In this weekly Japanese candlestick chart of SNOW, below, I can see two candles that give me pause. The most recent candle bar is a doji where the open and close are the same or nearly the same. This candle tells me that buyers and sellers are in balance. If prices move lower this week a top reversal would be in place. The candle bar two weeks ago shows us an upper shadow above $180, telling us that traders rejected those highs. The slope of the 40-week moving average line is now positive. The weekly OBV line is showing new strength. The MACD oscillator is testing/breaking the zero line.
In this daily Point and Figure chart of SNOW, below, I can see that prices reached and exceeded a $178 price target.
In this second Point and Figure chart of SNOW, below, I used weekly price data. Here the software is projecting a longer-term price target in the $291 area.
Bottom line strategy: I don't know what SNOW will tell shareholders and fundamental analysts this evening, but there are clues that suggest prices could pull back or correct a bit in the short run. Traders who are long should consider trimming those positions or nailing down some profits.
