My Watchlist [50]: SNAP (dtd 16/2/24)

Hi everyone! Let’s analyse a retail darling:

Snap Inc. (NYSE: SNAP)

SNAP was in the process of filling the 2022 ER gap between 14.57-21.71. A strong ER and guidance would have led to a significant spike up. However, reported figures fell short of estimates, and it dumped post-ER. Interestingly enough, it invalidated the bullish descending channel it was trading in and broke down. However, it has since found support at the green ascending trendline, forming a potential higher low and hidden bullish divergence in the process. It has also retraced between 61.8% and 78.6% of the move up from 8.28 lows.

Here’s a closer look at the daily chart. Note the small candle spread yesterday but higher than normal volume. It is indicative of accumulation at current levels. You can also see the failed breakout and breakdown of the bullish descending channel in greater detail here. Note the hidden bullish divergence that is potentially forming as well.

Given the relative proximity to ER, we have to analyse lower timeframes to determine when this reverses. Currently, SNAP is trading in a very near-term falling wedge reversal pattern and forming a bullish divergence. A breakout should see a retest of 12+, back to the 12.39 open.

Despite the bearishness, I wouldn’t sleep on SNAP. Last ER, it was also sold off. However, what followed was a drift higher. The same can happen again - forming a higher low overall is bullish for the stock.

Sentiment: BUY

Summary (with Price Targets - NFA):

• Higher high and higher low pattern, with a potential higher low formed on ER capitulation. Longer-term measured move from current levels should be to 21.71 (May’22 levels), while near-term targets should be to drift towards the most recent ER gap level at 16.77.

• Accumulation can take place at current levels. If we break below, then we could be staring at a move towards the 78.6% Fib retracement around 10.34. However, a trendline break is not ideal as it could lead to a continued downtrend, similar to DOCU.

• The broader market looks like it wants to break out, and could help to drive inflows into SNAP.

**Analysis was as of 9/2/24. But the long-term outlook remains the same.

@TigerStars @TigerWire @TigerEvents @CaptainTiger @MillionaireTiger

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