Let’s see if this stock can $SNAP out of it’s consolidation. (January 07, 2021)

by DAN SNAP 

This is Scott with your Chart of the Day. I want to take a look at Snapchat ( NYSE: SNAP ). Snapchat ( NYSE: SNAP ) has been in a pretty decent sideways consolidation for much of December and into January here. But today we ended up bumping against a clearly defined level of resistance right around there. You can see how this level acted as resistance back here, we’ve never been to close above 53.85. We hit there, pulled back. Got above, came back. Tested, tested, tested again today. So I think that gives us a pretty clear level to trade against.

What I want to see here from Snapchat ( NYSE: SNAP ) is a move above and a close above 53.85. So I am going to set an alert there for a potential breakout to the upside because that is a clearly defined level of resistance. Now, if you take this trade there are a couple of levels of support that you can look at depending on what kind of trader you are. If you are more of a position trader you probably want to have a stop down here at around 47.00. Now, I will say that is a little bit of room, that’s almost 13 percent, that’s a little much for me as a swing trader.

What I would do as a swing trader is take the trade as long as the stock stays above that line and holds above that line. If we close below that line then it’s not breaking out, not doing what we want it to do. So I think it’s a pretty clear level to trade out of and I think it’s a stock that you should definitely watch just to see if it can snap out of this consolidation.

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