Here's what Jim Cramer had to say about one of the stocks that callers offered up during the Mad Money Lightning Round Wednesday evening, Snap Inc. (SNAP) . "I think they're gonna have a great quarter with fantastic growth," said Cramer referring to the camera application that helps people to communicate through short videos and images.
The last time we dove into the charts of SNAP was back on Dec. 2 we wrote that, "These four charts of SNAP suggest that SNAP could weaken in the weeks ahead. Cramer's advice of taking out your cost basis looks like a timely suggestion."
Let's review the latest charts.
In the daily bar chart of SNAP, below, we can see that the shares went sideways for December and January so holding SNAP for that period of time did not produce gains. SNAP did rally to a new high in February but gave back all those gains into late March. Prices have rebounded this month but have not broken above the March highs. SNAP has been trading around the flat 50-day moving average line. The 200-day moving average line has a positive slope.
The On-Balance-Volume (OBV) line shows a peak in late February followed by sideways action. The Moving Average Convergence Divergence (MACD) oscillator has moved below and above the zero line in March and April.
In the weekly Japanese candlestick chart of SNAP, below, we can see a couple of lower shadows in February telling us that traders rejected the lows. The 40-week moving average line is bullish and the OBV line has been constructive since March of last year.
The MACD oscillator is pointed down but narrowing toward a possible buy signal in the weeks ahead.
In this daily Point and Figure chart of SNAP, below, we can see that the software is projecting a downside price target. A rally to $66.08 would turn this chart bullish.
In this weekly Point and Figure chart of SNAP, below, an upside price objective of $100 is being projected.
Bottom-line strategy: I have no special knowledge of what kind of numbers SNAP is going to report after the close of trading Thursday. Traders could either go long ahead of the numbers or wait for strength above $65. Risk $5 from entry either way. The $100 area is our longer-term price objective.