Snap Tried to Rally But it Didn’t Last Long
Snap has been rallying as lawmakers move against TikTok, but traders may be selling the news.
Today we’ll consider the daily chart of the social-media company, which has struggled since growth names hit the wall over a year ago.
The first pattern is the jump above $12.50 on Tuesday, fueled by the news from Capitol Hill. SNAP failed to hold those gains, resulting in false breakout above the February high.
Next is the 200-day simple moving average (SMA). Prices remained below this long-term trend indicator during the entire decline that began in October 2021. This week’s rally was its first test of the 200-day SMA, which may trigger some alerts for trend followers.
Third, the stock gapped lower following its last two quarterly reports.
Finally, stochastics may be peaking near overbought territory.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
Today we’ll consider the daily chart of the social-media company, which has struggled since growth names hit the wall over a year ago.
The first pattern is the jump above $12.50 on Tuesday, fueled by the news from Capitol Hill. SNAP failed to hold those gains, resulting in false breakout above the February high.
Next is the 200-day simple moving average (SMA). Prices remained below this long-term trend indicator during the entire decline that began in October 2021. This week’s rally was its first test of the 200-day SMA, which may trigger some alerts for trend followers.
Third, the stock gapped lower following its last two quarterly reports.
Finally, stochastics may be peaking near overbought territory.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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