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Can Snap Stock Snap Back? Check the Chart.

by WOOWinvest
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Can Snap Stock Snap Back? Check the Chart.


break off (SNAP) – Get Snap Inc. Class A Report Shares tumbled on Friday, down about 38% at the last check after Snapchat’s parent company reported earnings.

Twitter (TWTR) – Get Twitter Inc. report Nor did it wow anyone, though it had the entire Elon Musk saga dragged out and become a major talking point. Shares of the microblogging site were flat to down on the day.

Snap’s results are affecting the entire social media and digital advertising landscape, and Meta (META) – Get Meta Platforms Inc. Reportsletter (GOOGL) – Get the Alphabet Inc. report (GOOG) – Get Alphabet Inc. Reportinterest (PINS) – Get Pinterest Inc. Class A Report and others are under pressure.

This comes after Snap’s second-quarter earnings report, which was mixed. The company slightly beat analysts’ earnings estimates, but missed revenue estimates as sales rose 13% year over year.

Although the photography-related site saw an 18% increase in active users in the second quarter, revenue for the quarter was roughly flat compared to the same period last year, management said. That bright spot was ignored. It didn’t help that Snap declined to issue short-term guidance.

Snap’s drop this morning was a reminder that the market is still in a bear market, and stocks that disappoint investors will be punished.

Trade Snap stock

A daily chart of Snap stock.

After five days of losses, Snap’s stock had a five-day rally ahead of the earnings report.

scroll to continue

On the decline, the stock did not retest the lows. In the rally, shares rose 25%, heading straight into the 50-day and 10-week moving averages.

The stock will be hit hard by good results — as shown today — and if it disappoints, it will be crushed. Right now, there are only two levels that really matter: $11.88 and $10.

The $11.88 level is the lowest since last month and marks a 2022 low. Of course, this is no longer the case with today’s operations.

If Snap opens below $11.88 and reclaims that level, bulls will have the opportunity to quickly establish long positions at today’s low. Conversely, Snap stock opened at $11.10 and has been falling since.

Now, investors have to wonder if the stock will dip below $10 and into the single digits.

At this point, many traders would think there is no bullish momentum for the stock — and they would be right.

We will have to keep an eye on the upside at $11.88 to see if this area acts as resistance. On the downside, traders should watch out for $10.

Still, if Snap does hit $10, that doesn’t mean it’s a buy. Keep in mind that Snap stock traded at a low of $7.89 in March 2020. It is entirely possible that we will see this level again.

Snap is a better company now than it was then, but that doesn’t always matter to the market in the short term. As the old trading adage goes, “When in doubt, stay away.”

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