Snap Stock News and Analysis: After 20%-plus plunge, where is the support for SNAP?


  • Snap stock collapses more than 22% in Friday's pre-market trading.
  • The social media app Q3 reported earnings after Thursday close, missing estimates.
  • SNAP turns main moving averages into resistance, desperately tries to find support.

Snap (SNAP), the social media app popular with teens and hedge funds alike, may be less popular with the latter after plunging more than 22% in Friday’s premarket and at a similar on Friday's official open in New York. The company missed topline figures in their Q3 earnings that came out after Thursday’s close. Snap did, however, post a beat on daily active users of 306 million, which came in about 1% above forecasts, and net earnings per share of $0.17 versus a consensus forecast of $0.08.

Snap Stock News: Apple’s Ad-mageddon comes for the new kid

Snap just barely missed Q3 revenue estimates. It reported $1.07 billion in sales rather than the projected $1.1 billion. What sent the stock into a tailspin though was a reduced outlook for the fourth quarter.

SNAP executives now say to expect revenue growth of about 19% to 20%. This is well below Q3’s 58% YoY topline growth. The entire reason SNAP stock rose 300% during the covid market boom was its extraordinary growth rate.

The blame is squarely being placed on Apple’s (AAPL) iOS updates that have rendered many tools for advertisers obsolete. Since many of Snap’s users have iPhones, the tools normally used to optimize ad campaigns on iOS apps have become blind to important user data.

“What you’re seeing when we go into Q4 is a full-quarter impact of those issues. And you know the reason that we’re mentioning iOS 15 is that that’s going to continue to disrupt the advertising ecosystem,” said Derek Anderson, Snap’s chief financial officer, during the earnings call.

Snap's Q3 earnings and Apple-induced advertisement slowdown is also affecting peers like Facebook (FB), Twitter (TWTR) and Pinterest (PINS).

SNAP Stock Chart: Finding support after Q3 plunge

SNAP shares have mostly remained above the 20-day moving average since the rally that began in August. More recently, several corrections have pushed SNAP price down to the 35-day moving average. Both times, however, Snap stock bounced off this support.

With the premarket selling off to the high-$50s though, the price looks destined to turn the 50-day moving average, now at $62.05, into resistance. Mid-July saw a strong rally take off from $57.88, and this area may supply some demand once again.

$41.37 is where the 100-day moving average sits at present. Before SNAP price reaches this nadir though, the 78.6% Fibonacci level should act as support around $54.97.

SNAP weekly chart

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news

Latest Forex News


Latest Forex News

Editors’ Picks

EUR/USD eases below 1.1300 amid firmer yields, Fed’s Powell eyed

EUR/USD remains pressured towards 1.1250, reversing 2021’s biggest daily gains as the US dollar rebounds with the Treasury yields. Global scientists, policymakers placate fears of Omicron even as national border checks return to the table. German inflation, central bankers’ speeches eyed.

EUR/USD News

GBP/USD remains vulnerable below 1.3350 amid USD strength, Brexit woes

GBP/USD is trading below 1.3350, lacking any firm directional bias heading into the European session. Renewed USD buying acts as a headwind for the major amid Brexit and covid-related uncertainties. Expectations for a BoE rate hike limit the downside.

GBP/USD News

Gold faces a wall of resistance en-route $1,800

Gold price rebounds but not out of the woods yet while below $1,800. Omicron covid variant woes will continue to play out, impacting USD and gold.

Gold News

MATIC price eyes 15% advance as Uniswap prepares to migrate to Polygon

MATIC price recently swept the swing lows of a crucial barrier. This development comes as the cryptocurrency market recovers from the COVID-induced crash over the past three days.

Read more

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

Forex MAJORS

Cryptocurrencies

Signatures