Snap (NYSE:SNAP) is up 206% since 12/21/18 lows, the lows of $4.82 that even the most bearish fundamental analyst from its IPO days (with $10 price target despite $30 IPO) classified as "oversold".
SNAP has had some exciting news over the past few weeks. Things are finally going right for the company that has lost 2/3rds of its market value since its IPO. Snap Show, announced on July 10th of 2019, will draw influencers to the app, which will help direct consistent traffic to Snapchat, build up its infrastructure and boost ad revenue.
Snap launched 50 shows during Q1'19 to a strong and positive response from users. The filters that they implemented in May doubled the number of app downloads from 600k a day to more than 1.5 million. They cleaned up the Android app, boosting their base by 6%.
SNAP's ad revenue growth grew 36% during Q4'18, and they expect to continue to tap into that growth as Snap Show and Collection Ads continue on the uptrend. Things are looking good for the company going into this next round of earnings on July 23rd.
Based on my technical observations, things are strong for SNAP going into the end of the month. I believe that they have the potential to hit a $20 price target, and there are several options plays that investors can implement to take advantage of that. I do think that there will be a ~20% drawdown immediately after earnings, but the stock will recover in the months following, potentially reaching beyond its IPO price.
My Technical Observations
SNAP was oversold in December 2018 when liquidity entered the markets and short coverings helped to bring the price action inside the Keltner Channel (KC), then above the 10 week moving-average, then a cross of 10 to 21 week moving average. There was
