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by Darius Anucauskas

Snapchat Stock Is In Correction Mode

From around mid-January, the Snapchat Inc stock (NYSE: SNAP) continues to move in the upwards direction, while trading above a medium-term upside support line taken from the low of January 16th. From around the end of July, the stock started correcting lower and it seems that it could continue drifting to the downside for a bit more. But if the price keeps on balancing above that upside line, we will stay positive, at least over the short-term period.

As mentioned previously, a further move lower could place SNAP below 15.50 hurdle and force it to test the next possible support area, at 14.90, which is the high of July 23rd. The stock might find good support around there, rebound and push higher again. Such a move could send the share price back above the 15.50 obstacle and target the 17.20 barrier, marked by the high of August 9th.

Our oscillators, the RSI and the MACD, support the above-discussed idea. The RSI is currently just slightly below 50 and remains somewhat flat. The MACD is slowly drifting south, while sitting below its trigger line, but still above zero. Such a picture could come inline with seeing a small throwback before another leg of buying.

Alternatively, if the aforementioned upside line breaks and the price falls below the 13.95 hurdle, marked by the low of July 19th, this could open the door for a further move down. Such activity could force a few investors to liquidate on some of their current positions and the stock might slide even more, potentially bypassing the 13.40 obstacle and aiming for the 12.60 zone, which marks the high of April 8th and the low of June 6th. SNAP could initially stall around there, or even rebound somewhat. But if there is still a shortage of new buyers, the price might fall again, possibly breaking the 12.60 area and targeting the 11.85 level, marked by the swing high of May 6th.

Snapchat daily

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