SNAP This: Snapchat Could Be Heading To $20

08/02/19 12:18:18 PM

by Fawad Razaqzada

Snapchat could be poised for a rally.

Security: SNAP
Position: N/A

SNAP's quarterly earnings topped expectations on July 23 causing the stock to gap sharply higher and on good volume too. The stock has since been consolidating for several days. Consequently, this could turn out to be a case of a runaway stock, where the gap never gets filled, or gets only partially filled.

Snapchat parent company Snap reported an EPS of -$0.19 in Q2, beating expectations of $-0.22. It also posted better-than-expected revenues and users numbers.

The company said that user growth over the quarter was driven by the popularity of its augmented reality lenses feature and CEO Evan Spiegel declared, "Today, more than 75 percent of the 13-34-year-old population in the United States is active on Snapchat, making us larger than services like Facebook and Instagram among this audience, and demonstrating the broad-based appeal of our service."

Whether you agree with Spiegel or not, one thing is quite clear: the technical backdrop looks strong for Snapchat, with the stock holding its own above the 50-day simple moving average, the 21-day exponential average and a bullish trend line:

Figure 1. Daily chart for SNAP.

Graphic provided by: TradingView.

I am now on the lookout for a new bullish trigger, which could encourage fresh buying now that it has consolidated its recent gains. Even a small pullback here would not materially erode the bullish bias so long as key support at $15.00 holds. The trigger could be a breakout from a bull flag pattern, or a candlestick pattern such as a bullish engulfing candle. If the bullish trend continues, the first objective for the bulls is at $18.36, the most recent high. Thereafter, the psychologically-important $20.00 is the next hurdle.

Fawad Razaqzada

Fawad Razaqzada is an experienced analyst and economist having been involved in the financial markets since 2010 working for leading global FX and CFD brokerages. Having graduated with a degree in economics and leveraging years of financial market experience, Fawad provides retail and professional traders worldwide with succinct fundamental & technical analysis. In addition, he also offers premium trade signals to subscribers, and trading education to help shorten the learning curves of developing traders. He has also been trading on his personal account for many years. Follow Fawad on twitter @Trader_F_R or visit his website at TradingCandles.com.

Title:	Financial Market Analyst
Company:	TradingCandles.com
	London,
Website:	tradingcandles.com
E-mail address:	fawad.razaqzada@hotmail.co.uk
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TECHNICAL ANALYSIS

SNAP This: Snapchat Could Be Heading To $20

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