Is Snap Overbought?Snap had a sharp rally on February 4 after quarterly results beat estimates. But now its longer-term downtrend may be reasserting itself.
The first pattern on today’s chart is the stochastic oscillator. It’s swinging back to the downside after jumping into overbought territory.
Next, price tested but was unable to break above the 50-day simple moving average (SMA). That suggests the downtrend remains in effect.
Third, notice how the recent high occurred slightly above $40, near the mid-December low. It’s also close to the high-volume breakout area in October 2020. Has this price zone become resistance?
Finally, the macro backdrop may be challenging for SNAP given the weakness in growth stocks and the broader communications sector.
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