Snap perfectly positioned for higher 80s rally

Snap Inc. (SNAP) broke above the five-month resistance following strong Q2 results in July and promptly fell asleep, grinding sideways in a dead pattern that has now lasted more than five weeks. Breakout buyers have not gained a cent during this period, with that one price bar acting as an impenetrable barrier. Still, it’s nearly impossible to make a bearish call on the social media app, as their growth has been spectacular over the past two years.

Growth shoots on all cylinders

The company posted a surprising second-quarter earnings of $0.10 per share, beating estimates by $0.11. Revenue rose a phenomenal 116.2% year-over-year to $982.11 million, more than $130 million higher than consensus. 293 million daily average users (DAUs) marked a 23% year-over-year increase, prompting executives to provide upward Q3 guidance that now expects revenue of $1.07 to $1.085 billion, compared to previous expectations of $1 .01 billion.

Wedbush analyst Ygal Arounia raised his price target to $88 following the news, noting, “Snap delivered exceptional Q21 results in both revenue and EBITDA, also with a significantly better-than-expected 3Q revenue forecast. The digital advertising market is clearly strong and is picking up steam as the global reopening and strong economic environment progress, Snap sees strength across the board, across multiple industries (including retail and restaurants), and across all of its advertising products.

Wall Street and Technical Outlook

The Wall Street consensus is at an Overweight rating after a historic return of 456% since the start of 2020, based on 24 Buy, 3 Overweight, 11 Hold and 1 Sell recommendation. Price targets currently range from a low of $42.20 to a street high of $110, while the stock will open Tuesday’s session about $12 below the $87 average target. This placement suggests that any positive catalyst will generate a rapid push to new highs.

Snap completed a round trip to its 2017 high in the mid-20s in July 2020 and broke out in October, with continued progress stalling at 73.59 in February 2021. of a powerful one-day rally after Q2 results on July 23rd. A breakout attempt in mid-August failed, producing a slow downward drift that could now present a low-risk buying opportunity.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: The author held no positions in the above securities at the time of publication.

This article was originally posted on FX Empire

More from FXEMPIRE: