Snap Stock Extends Rally After Analyst Upgrade

This article was originally published on this site

Snap Inc. (SNAP) shares rose more than 12% during Thursday’s session after BTIG upgraded the stock from Neutral to Buy with a price target of $15.00 per share, representing a nearly 50% premium to Wednesday’s closing price. The analyst noted the rise in domestic ad spending in the second half of 2018, higher-quality content, better user engagement, recent executive hires and a clearer strategic plan as its rationale.

The move follows Consumer Edge Research’s initiation of coverage on Snap stock earlier this week with a price target of $14.00 per share. Despite the stock trading sharply off of its 52-week highs, investor confidence in a turnaround has prompted Snap to nearly double in price since its strong fourth quarter results. Bullish analysts raised their price targets in response to those financial results, but bearish analysts see further downside.

Snap faced turmoil last year following its poorly received redesign, tough comps from the prior year and a government probe stemming from a class action lawsuit over its initial public offering. Investors are hoping that these issues are in the past and that management can move forward with a focus on growth.

StockCharts.com

Traders should watch for consolidation below R1 resistance at $11.25 and above trendline support at $10.00 over the coming sessions. If the stock breaks out from R1 resistance, traders should watch for a move toward upper trendline and R2 resistance at $12.69. If the stock breaks down from trendline support, traders may see additional support at the 200-day moving average of $9.25 or the pivot point at $8.97.

The author holds no position in the stock(s) mentioned except through passively managed index funds.

Source: Investopedia

Powered by WPeMatico