Snowflake's Indicators Haven't Improved and a Rally Is Not in Sight

Snowflake SNOW was raised to a fundamental "outperform" (buy) at BNPP Exane Thursday with a price target of $200. Let's check out the technical weather report for SNOW.

In this daily bar chart of SNOW, below, I can see that prices have found buying interest in the $150-$140 area in recent weeks. Earlier in 2023 SNOW found buyers in the $140 area. SNOW trades below the declining 50-day moving average line and below the negatively sloped 200-day moving average line. 

The On-Balance-Volume (OBV) line has slumped sharply lower the past two months telling me that sellers have been much more aggressive than buyers. The trend-following Moving Average Convergence Divergence (MACD) oscillator has been improving since late March but is still below the zero line and still not at an outright buy signal.

In this weekly Japanese candlestick chart of SNOW, below, I can see that it made a long base pattern and had a temporary upside breakout. SNOW returned back into the base and the indicators weakened. Prices now trade below the declining 40-week moving average line.

The weekly OBV line is moving sideways after a decline. The MACD oscillator has fallen back below the zero line for an outright sell signal.

In this daily Point and Figure chart of SNOW, below, I can see that prices have reached a downside price target in the $145 area.

In this weekly Point and Figure chart of SNOW, below, I can see that the software is projecting a potential downside price target in the $65 area. A trade at $166 may be needed to turn this chart positive.

Bottom line strategy: Shares of SNOW have made an important decline in the past two months and the indicators have yet to improve. SNOW could rally in the weeks ahead but I think it will need more basing (read sideways) price action before the conditions are right for a rally.

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