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Thursday, September 30, 2021 8:54:03 AM
Signal Says Buy the Dip on This Software Snowflake Inc (SNOW) Stock
By: Schaeffer's Investment Research | September 30, 2021
• SNOW sports a promising technical setup right now
• Speculating on SNOW's next move with options might be a prudent play
The shares of Snowflake Inc (NYSE:SNOW) got a jolt at the end of August following an incredibly well-received quarterly earnings report. The rally lasted well into September, and it looked like the software stock was bucking the broader market's seasonality-driven performance. However since grazing $330 and annual highs on Sept. 17, SNOW has pivoted lower and now sports a 3.4% deficit this month. The silver lining is that this pullback has put the stock in contact with a historically bullish trendline that, if past is precedent, could signal upside in the coming month.
SNOW just came within one standard deviation of its 40-day moving average after --per the chart below -- spending a considerable amount of time above the trendline. A study from Schaeffer's Senior Quantitative Analyst Rocky White reveals that similar pullbacks to the 40-day have occurred two other times in the past three years. One month after each signal, SNOW was higher, averaging a return of 16.3%. Short-term returns following these signals are impressive as well, with Snowflake stock averaging an 11.2% jump just one week after these pullbacks. A similar rise from its current perch would put SNOW at new annual highs by the end of October.
A good portion of analysts are still hesitant on the equity. Off the 25 in coverage, 15 consider it a "hold" or worse. Meanwhile, the 12-month consensus price target of $323.51 is a 9.5% premium to current levels, which could spark upgrades and/or price-target hikes, should the stock stage a bounce next month.
An unwinding of pessimism among options traders could benefit SNOW, too. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.02 stands higher than 82% of readings from the past 12 months. In other words, short-term options traders have rarely been more put-biased.
Speaking of which, now looks like a opportune time to get in on Snowflake stock's next move with options. The stock's Schaeffer' volatility index (SVI) of 43% stands higher than only 9% of readings from the past 12 months. This implies options traders are pricing in relatively low volatility expectations at the moment.
Read Full Story »»»
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By: Schaeffer's Investment Research | September 30, 2021
• SNOW sports a promising technical setup right now
• Speculating on SNOW's next move with options might be a prudent play
The shares of Snowflake Inc (NYSE:SNOW) got a jolt at the end of August following an incredibly well-received quarterly earnings report. The rally lasted well into September, and it looked like the software stock was bucking the broader market's seasonality-driven performance. However since grazing $330 and annual highs on Sept. 17, SNOW has pivoted lower and now sports a 3.4% deficit this month. The silver lining is that this pullback has put the stock in contact with a historically bullish trendline that, if past is precedent, could signal upside in the coming month.
SNOW just came within one standard deviation of its 40-day moving average after --per the chart below -- spending a considerable amount of time above the trendline. A study from Schaeffer's Senior Quantitative Analyst Rocky White reveals that similar pullbacks to the 40-day have occurred two other times in the past three years. One month after each signal, SNOW was higher, averaging a return of 16.3%. Short-term returns following these signals are impressive as well, with Snowflake stock averaging an 11.2% jump just one week after these pullbacks. A similar rise from its current perch would put SNOW at new annual highs by the end of October.
A good portion of analysts are still hesitant on the equity. Off the 25 in coverage, 15 consider it a "hold" or worse. Meanwhile, the 12-month consensus price target of $323.51 is a 9.5% premium to current levels, which could spark upgrades and/or price-target hikes, should the stock stage a bounce next month.
An unwinding of pessimism among options traders could benefit SNOW, too. The security's Schaeffer's put/call open interest ratio (SOIR) of 1.02 stands higher than 82% of readings from the past 12 months. In other words, short-term options traders have rarely been more put-biased.
Speaking of which, now looks like a opportune time to get in on Snowflake stock's next move with options. The stock's Schaeffer' volatility index (SVI) of 43% stands higher than only 9% of readings from the past 12 months. This implies options traders are pricing in relatively low volatility expectations at the moment.
Read Full Story »»»
DiscoverGold
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Caveat emptor!
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