Looking at SNAP on the weekly time frame, I kept a basic chart with only one support & resistance zone as well as one indicator that is mine, the cycle bottom indicator. We can see in the 2019-2021 cycle that we created this move from $7.05, which is marked as the bottom level in the accumulation zone with $9.20 being the top level, where the price is currently trying to break out of.
I believe most of the storm of this price falling has passed us, and we’re about to enter a period of extended consolidation. Markets can’t move up down up down in a ping pong fashion, it needs time to consolidate. $7.05 - $9.20 is a prime accumulation zone for the longer term where we return to the mean around $23, marked as the bottom level of the resistance band seen on the chart.
Some key factoids about Snapchat:
Going off solely the quarterly revenue and leaving the increase in DAUs out of the equation, the fair value of SNAP should be 3x higher than it is right now, and a return to mean from this price point would sit Snapchat comfortably around the bottom level of the resistance band, conveniently the same $23 level as marked out on the chart.
From here, we may see the start of the next cycle, or we may not. That’s forecasting with a crystal ball in a sense, however, I am expecting another cycle in the future, although I’m not sure how long this consolidation period will be.
Cathie Wood entered at $54.98.
Cheers traders!
As always please do your own research, I am not a financial advisor and this chart is for educational purposes only.
I believe most of the storm of this price falling has passed us, and we’re about to enter a period of extended consolidation. Markets can’t move up down up down in a ping pong fashion, it needs time to consolidate. $7.05 - $9.20 is a prime accumulation zone for the longer term where we return to the mean around $23, marked as the bottom level of the resistance band seen on the chart.
Some key factoids about Snapchat:
- 319 million Daily Active Users (DAUs)
- $1.3B Quarterly Revenue (3x from 2019)
- Advertising accounts for 99% of Revenue
Going off solely the quarterly revenue and leaving the increase in DAUs out of the equation, the fair value of SNAP should be 3x higher than it is right now, and a return to mean from this price point would sit Snapchat comfortably around the bottom level of the resistance band, conveniently the same $23 level as marked out on the chart.
From here, we may see the start of the next cycle, or we may not. That’s forecasting with a crystal ball in a sense, however, I am expecting another cycle in the future, although I’m not sure how long this consolidation period will be.
Cathie Wood entered at $54.98.
Cheers traders!
As always please do your own research, I am not a financial advisor and this chart is for educational purposes only.