Traders Should Avoid the SNOW
Despite reporting a beat, cloud company Snowflake is seeing its share price dip.
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Snowflake SNOW reported Wednesday night a non-GAAP EPS of $0.18, which beat estimates by $0.02, and revenue of $868.82 million, which beat by $18.67. Despite a beat, traders sold off the stock on Thursday morning, so let's check out the charts and indicators for some guidance.
In this daily bar chart of SNOW below, I can see that prices have slumped lower since February. Prices rallied above the 50-day moving average line but Thursday's weakness could mean that prices retreat back below this moving average line. The 200-day moving average line has a negative slope and intersects up around $164. The On-Balance-Volume (OBV) line has struggled since February. The Moving Average Convergence Divergence (MACD) oscillator has been below the zero line since early March.
In this weekly Japanese candlestick chart of SNOW below, I can see that the share price of SNOW has struggled since February. The chart before February was looking encouraging, but then we saw a decline to a new low. Prices trade below the declining 40-week moving average line. The weekly OBV line made a high in February and turned lower, telling me that traders and investors have been more aggressive sellers than buyers. The trend-following MACD oscillator is bearish and below the zero line.
In this daily Point and Figure chart of SNOW below, I can see an upside price target in the $146 area but today's early decline has not been plotted.
In this weekly Point and Figure chart of SNOW below, I can see a potential downside price target in the $81 area.
Bottom line strategy: Will the early August low be retested? Maybe. Is this decline an opportunity to buy? It's too early to tell. Overall, the charts and indicators are mixed to bearish and traders should focus on other opportunities.
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