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Snap Inc.

Market Opportunities - 06/02/2020

06 February, 2020

The example below uses Contracts For Difference (CFDs). Calculations are only on the price of the specific instrument on the date below and calculations indicate a possible opportunity for profit or loss. No representation or warranty is given as to the accuracy or completeness of this information, consequently any person acting on it does so entirely at their own risk.

Snap Inc.(#SNAPCHAT) uptrend opportunity based On 1.00 Lot Calculation:

Snap Inc missed Wall Street estimates for fourth-quarter revenue on Tuesday, February 04, creating a Price gap, as it faced tough competition from digital advertising giants Google and Facebook, sending its shares down more than 14%.

Revenue, which the company generates from selling advertising on Snapchat, rose 44% to $560.88 million but missed the average analyst estimate of $563.03 million. Snapchat has only 0.5% of worldwide digital ad revenue, while Facebook accounts for 21.1%.

Snapchat's DAU (daily active users), a widely watched metric by investors and advertisers, was above analysts' average estimate of 215.04 million. Snap said daily active users (DAU) on Snapchat rose 4% to 218 million in the three months ended December. 31 from the prior quarter. The figure was up both sequentially and year-over-year in each of North America, Europe, and the Rest of the World, and showed gains on each of the iOS and Android platforms. The user metric stood at 186 million a year earlier. The average revenue per user jumped 23% to $2.58 during the quarter from a year earlier.

Snap is focusing on growing the total number of advertisers on Snapchat as well as diversifying the types of advertisers it works with, said Jeremi Gorman, Snap's chief business officer, on an earnings call with analysts.

Snap's net loss widened to $240.7 million, or 17 cents per share, from $191.67 million, or 14 cents per share, a year earlier.

The company expects first-quarter revenue in the range of $450 million to $470 million. Analysts on average were expecting $461.6 million.

"Given the substantial long-term opportunities ahead, we are working hard to scale our revenue so that we are able to self-fund our investments in the future," Chief Executive Officer Evan Spiegel said during the call.

Technically, according to the Daily Chart, the stock price has been in a strong upward trend since October 2019. During the last 12 months the stock price has increased by 190%, hitting a high of $19.76 on January 24. The current price is below the 20-day and 50-day Moving Average, but above the 100-day Moving Average. The price found support around Fibonacci 50, signaling that it may bounce back toward Fibonacci 38.2 which is $17.08. The Hourly Relative Strength Index is 23, well below 30, suggesting that the stock price is oversold and some recovery may occur in the following days.

In 2019, the Snap price has 32 downward Gaps and all of it was closed, mostly within 5 days (91% of all Gaps were closed within 5 days). Regarding the Gap strategy and historical movement, the Snap price, in the next few days, may go up, toward $17.08 (Fibonacci 38.2) which represents Resistance 1 level.

Snap Inc, February 06, 2020
Pivot point: 16.10

Snap

Weekly

Trend direction

UP

Resistance 3

19.15

Resistance 2

18.10

Resistance 1

17.08

Support 1

15.15

Support 2

14.30

Support 3

13.25

Example of calculation base on weekly trend direction for 1.00 Lot*

Snap

Pivot Points

Resistance 3

Resistance 2

Resistance 1

Support 1

Support 2

Support 3

Profit or loss in $

3,050.00

2,000.00

980.00

-950.00

-1,800.00

-2,850.00

Profit or loss in €*

2,771.52

1,817.39

890.52

-863.26

-1,635.65

-2,589.78

Profit or loss in £**

2,349.26

1,540.50

754.84

-731.74

-1,386.45

-2,195.21

* 1.00 lot is equivalent of 1000 units
** Calculations for exchange rate used as of 14:00 (GMT) 06/02/2020
Fortrade recommends the use of Stop-Loss and Take-Profit, please speak to your Senior Account Manager regarding their use.
*** Please consider closing your position in profit, even if it is lower than suggested one
**** Trailing stop technique can protect the profit – Ask your Senior Account Manager for more details

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