Snap May Be Vulnerable as Earnings ApproachSnap has moved sideways for a year, but some traders may expect its prior downtrend to resume.
The first pattern on today’s chart is the series of bearish gaps following the last four quarterly reports. The social-media stock held its ground after those drops -- probably because it had already lost about 80 percent of its value in the preceding nine months. But now it’s had an entire year to consolidate.
Next, SNAP rallied about 75 percent between early May and mid-July along with the Nasdaq-100. Does that create space to the downside?
Third, Wilder’s Relative Strength Index (RSI) just hit its most overbought level since October 2020. That may represent a peak.
Recent sessions could also be viewed as a top, with a shooting star on July 13 and then solid candles as intraday highs got sold. SNAP ended that phase by closing below its 8-day exponential moving average (EMA).
All these points may be important with earnings tomorrow afternoon.
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