Snowflake was a huge winner after going public however lately it’s fallen out of favor. Can it restore its prior momentum?
Snowflake ( SNOW) – Get Report truly grabbed Wall Street’s attention in September when it went public. Will it do so again when it reports earnings?
The business’s going public price was expected to be high however not numerous believed demand would be through the roof.
Let’s remember that when Snowflake went public on Sept. 16, the marketplace was in the midst of a high pullback. But purchasers weren’t shy with this one.
Investments from Salesforce ( CRM) – Get Report and Berkshire Hathaway ( BRK.A) – Get Report ( BRK.B) – Get Report dialed up the hype, as its IPO variety climbed from $75 to $85, then to $100 to $110, before settling at $120 a share.
It didn’t matter. Shares opened for trading at $245 prior to ultimately rallying all the way to approximately $429.
Now down about 40% to $255, financiers are questioning if Snowflake can gain back some of that momentum after it reports earnings after the close.
There’s a lot to unpack with this chart and recent IPOs are constantly tough. Fortunately, we have numerous months under our belt with Snowflake stock, in addition to one exceptionally gotten earnings reaction in December.
The last time the company reported, shares responded with a one-day rally of 16% followed by another 14% rally the next day. It’s also what fueled shares to a record high.
The tune has changed significantly, though.
Snowflake has gone from a stock that was bought on the dip to one that’s being offered on the rips. Its key moving averages that are supported are now resistance.
The $266 level had been essential in 2021, however has failed in current trading, while the 10-day moving average pressures share lower.
Last weeks low looms big, down near $243. If the post-earnings reaction is bearish and Snowflake moves lower, watch to see if $243 is broken and if so, if it’s reclaimed.
If $243 is broken and not recovered, the $225 to $230 area is possibly in play. The 161.8% extension of the downside measure comes into play at $226.
An overshoot of this area might have the $210 location in play, as well as the existing low at $208.55.
On a bullish response, we require to see Snowflake recover $266 and the 10-day moving average, however that shouldn’t be tough if bulls truly want this name.
The more unpleasant area comes into play in between $290 and $300. There it runs into the 21-day, 50-day, and 100-day moving averages, in addition to a VWAP step. Just above is the $303.50 pivot from December.
Needs to Snowflake get this zone, the February high is next in line near $327, followed by the 61.8% retracement near $350.