Is Snowflake's Stock Doomed After A Cross Below Support?

Is Snowflake's Stock Doomed After A Cross Below Support?

Photo: Darius Cotoi via Unsplash

Snowflake Inc. SNOW shares are trading lower Friday after Cleveland Research released a note to clients warning the company may be showing signs of slowed growth from its previous quarter, according to reports.

Snowflake was down 7.11% at $259.65 at last check Friday at publication.

Snowflake Daily Chart Analysis

  • The stock crossed below the higher low trendline Friday, possibly making a bearish break in what technical traders call an ascending triangle.
  • The stock crossed below both the 50-day moving average (green) and the 200-day moving average (blue) Friday, indicating sentiment in the stock may be starting to turn bearish.
  • Each of these moving averages may hold as a potential area of resistance in the future.
  • The $320 price level has held as resistance multiple times and could again. The higher low trendline held as support before the break, the price may hold this as resistance unless the price can get back above it soon.
  • The Relative Strength Index (RSI) saw a large drop Friday and pushed the RSI below the middle line. The RSI now sits at 41, showing there has been many sellers moving into the stock.

    (Click on image to enlarge)

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What’s Next For Snowflake?

Bullish traders are looking to see the stock bounce back up and reclaim the higher low trendline. If this happens then the stock may continue trading within the pattern and could break out after.

Bearish traders would like to see the stock stay below the higher low trendline and begin to hold it as an area of resistance. This could cause the stock to see a further push downward.

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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