Will Snap Reverse Course Or Print Its Next Lower High?

Snap, Inc SNAP was shooting up about 7% higher at one point on Friday, in tandem with the S&P 500, which was trading higher by 2%.

The bounce came as a relief for traders and investors of Snapchat’s parent company, as the stock has been heavily beaten down for months, plunging 74% from its Sept. 24, 2021 all-time high of $83.34 to reach a 52-week low of $29.95 on Thursday.

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The Snap Chart: Snap has been trading in a steep and fairly consistent downtrend since April 5, declining about 40% since that date. Snap’s most recent lower high was printed on May 4 and $30.19 and the most recent lower low was formed at Thursday’s low-of-day.

If Snap is going to reverse course into an uptrend, traders and investors can watch for the stock to print a reversal candlestick, such as a doji or hammer candlestick, above the most recent lower low, otherwise Friday’s price action could become the next lower high in the downtrend.
Technical traders may have anticipated the bounce would come because, on Thursday, Snap’s relative strength index dipped to about 27%. When a stock’s RSI falls below the 30% level it becomes oversold, which can be a buy signal for technical traders.
If Snap closes the trading session near its high-of-day price, the stock will print a bullish kicker candlestick pattern, which could indicate higher prices will come on Monday. If the stock closes the trading day with a long upper wick, it will print a shooting start candlestick, which could indicate lower prices are in the cards.
Snap has resistance above at $24.92 and $28.17 and support below at $22.33 and at the 52-week low.