Ever heard of Snapchat, the photo messaging app? If you’re a millennial (or have millennial-aged children), odds are that yes, you have.
Heck, you might even use it.
If you’re not familiar with Snapchat, though, you really should be. And not just because it took the world by storm several years ago. Originally released in 2011, the app allows users to transmit temporary photo and video messages, which upon being viewed, are deleted.
Intriguing, right? Back when it first came out, Snapchat was quite controversial, especially with parents whose kids could send (and receive) images that would disappear.
Over time, Snapchat grew in popularity, and in 2017, Snap Inc. (NYSE: SNAP) went public. Investors clamored for shares of the new tech firm, only to be disappointed when SNAP plunged in the months following its debut.
Despite boasting a large userbase, CEO Evan Spiegel couldn’t quite monetize Snapchat like he wanted to, and investors were more than happy to voice their displeasure by dumping the stock.
Almost two years after opening for trading at $24.00 per share, SNAP dropped all the way down to $4.82 – the stock’s all-time low. Since then, SNAP’s recovered, enjoying a very positive 2019.
But over the last three months, SNAP started to sell-off again, until it rebounded two weeks ago. Now, it sits at a highly promising crossroads, signaling to bulls that a new yearly high is within reach.
In the weekly candlestick chart above, you can see that SNAP is on a solid uptrend. Yes, there have been a few hiccups along the way, but for the most part, shareholders who bought in January have little to complain about – besides the September/October dip, of course.
And after hitting the lower Bollinger Band last week, SNAP appears ready to rebound. The 50-week moving average is trending upwards, and the current weekly candlestick is trading above the last three candle bodies. The stochastics, despite this week’s gains, are very low as well.
If SNAP closes out the current week at around the same price level, it might make sense to go long at $15.11, a little higher than the weekly high. The company already reported earnings on October 22nd (beating analyst estimates), meaning that there probably won’t be any surprise jumps in the near future.
So, for the rest of the week, keep an eye on SNAP to see where it closes. If it doesn’t completely take off (or crumble) over the next two days, a highly profitable trade could be waiting for us on the other side of resistance, in what’s looking like a robust bullish continuation.
