Snapchat (SNAP) – Social Media Acceleration – Oct 19th, 2020
Bullish – SNAP – $27.83
The Market broke out above its major resistance levels last week but price action has remained choppy and sentiment tightly coupled with the passage of more stimulus. As the government continues to negotiate on a stimulus package, only a breakout above $353 on SPY and $297 on QQQ would suggest a resumption of its broader bullish trend. Support levels below at $343 and $282 respectively are levels to watch, as a break below would put the markets back into a neutral tone.
SNAP Trade Idea:
On CNBC’s OptionsAction show on Friday, Tony Zhang reviewed Snapchat’s earnings next week. A recent breakout above its $26.50 resistance level on strong relative strength going into earnings provides a catalyst to reach new all-time highs. Coupled with SensorTower data showing SNAP’s 3rd strongest quarterly downloads since its IPO, suggests a strong user usergrowth story. Expecting the stock to trade higher on positive earnings data, Tony is buying a Nov $28/$32 Call Vertical @ $1.25 Debit.
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