SNAP finds support at 50-day moving average
Snap Inc. Class A (SNAP) Technical Analysis Report for Jul 31, 2020 | by Techniquant Editorial Team
SNAP finished the month -4.56% lower at 22.42 after edging higher $0.01 (0.04%) today on high volume, underperforming the S&P 500 (0.77%). Trading $1.13 higher after the open, the market was unable to hold its gains as the bears took control ending the day below its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SNAP as at Jul 31, 2020):
Friday's trading range has been $1.91 (8.37%), that's far above the last trading month's daily average range of $1.11. Things look different on the weekly timeframe, where the market's trading range of the last week has been way below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SNAP.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bearish Outside Bar.
After trading as low as 22.05 during the day, Snap found support at the 50-day moving average at 22.11. After spiking up to 23.96 during the day, the share found resistance at the 20-day moving average at 23.88. The last time this happened on March 25th, SNAP actually gained 6.41% on the following trading day.
While the stock is currently in a short-term downtrend, this might just be a correction, as both the medium and long-term trends are still bullish.
Selling could accelerate should prices move below the close-by swing low at 21.53 where further sell stops might get activated.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bearish Intraday Reversal" stand out. Its common bearish interpretation has been confirmed for Snap. Out of 141 times, SNAP closed lower 56.03% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the short side has been after six trading days, showing a win rate of 53.19% with an average market move of 0.44%.