SNAP Surged on Expected Higher Result, Will It Continue to Rise?

• HSBC has rated the SNAP stock with a “REDUCE” rating.
• SNAP stock has surged by about 11.98% on future expectations.
• SNAP stock price is trading at multi-year low levels.

The SNAP stock has shown a great rise in its price, as it has risen by over 11% on 16th October 2023. The company’s co-founder and CEO, Evan Spiegel in his commentary said that the company can achieve a daily active user count of 475 million. He further added that the advertising revenue for the year could increase by over 20% in 2024. This news has boosted the price of the SNAP stock.

The SNAP stock has fallen massively by over 90% from September 2021 to October 2022. It has reported a disastrous quarterly performance in the year 2022. The company has reported a net loss of $1.43 billion, which is 193% more than the previous financial year. It has witnessed a panic sell-off from the investors, which resulted in this giant fall. 

The SNAP stock has been rated by the rating firm HSBC. it has given a rating of “REDUCE” to the stock. The target price set by the firm is $7.50, which is over 23% below the current market price of the stock. It can create some pressure on the stock in the coming times. However, the recent commentary by the CEO can impact the future price as well. 

A Quick Glance of the SNAP Stock Chart

The SNAP stock has formed a symmetrical triangle kind of pattern. It is currently testing the upper trendline for the 3rd time. However, the stock is trying to form a W-pattern on the chart. If it tries to complete the pattern, then it has to move toward the level of $10.67. The stock price is currently trading above the 50-DAY EMA but below the 200-DAY EMA. It means the bulls are trying to dominate in a shorter time frame but the bears are still in dominance in a broader sense.

The SNAP stock price may face a rejection near the trendline at the level of $9.70. Apart from this, the horizontal resistance level for the stock is present near the levels of $10.67, $11.42, and $12.50. Considering the support levels, it is present near the level of $7.86, $7.44, and $6.57.

What Bollinger Band and Relative Strength Index are Suggesting about the Stock?

SNAP stock price has closed above the upper band of the indicator after both the Bands are enclosed. This indicates that the price can try to rise further from here. However, if the price closes inside the band, it can create some selling pressure in the stock. The relative strength index is currently placed above the 50-level which is a bullish sign for the stock.

Conclusion

The recent development in the SNAP stock has given a necessary push to the price. However, if the price continues to report poor financial results, then this glory will soon end. If the stock price breaks the symmetrical triangle pattern on the upside, it can move towards $10.67 and $11.42 levels. A breakdown from the pattern can move the price towards $7.86 and $6.57 levels.

Technical Level

• Resistance – $10.67 and $11.42
• Support – $7.86 and $6.57

Disclaimer

The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.