SNAP: Post-Earnings Analysis!Hello traders and investors! Let’s see how SNAP is doing today!
SNAP is dropping more than 25% the moment I write this analysis, and it seems nothing can save it. However, even in the most stressful moments, we can use technical analysis to understand the situation.
Not by coincidence, SNAP dropped to the $ 57 area, which was a previous support on July this year. This is good, because SNAP didn’t drop to a random point, but the problem is that we don’t see any reaction.
There’s not a single bullish structure around, and this is the first thing required in order for it to reverse. We don’t see any bullish chart pattern in the 1h chart, and it is too soon to talk about candlestick patterns in the daily chart.
If we see a bullish reaction, it could be amazing, as the risk/reward ratio is looking good for those who are out of SNAP and want to buy it at the cheapest price possible. However, there’s no way we can buy without confirmation. As Livermore would say: “Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader.”
As far as we know, it could drop all the way to $ 49.90 again, and that would be great. Nevertheless, as someone who’s out of SNAP, I see this as a possible buy. Do you think a drop of 25% is fair, or the market overreacted?
Either way, I don’t think this is a sell. The risk/reward ratio makes no sense. If I were shorting it, I would probably buy it back today, and take advantage of this movement.
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Have a good weekend!
