It’s hot and humid in Southern California…but that doesn’t mean there aren’t snowflakes around. Here’s how we can trade Snowflake ($SNOW) – July 9, 2021
SNOW
Here’s your Free Chart for the weekend. It’s not really a chart, it’s a trade. We’ve got Snowflake ( NYSE: SNOW ) here. The stock has been kind of basing for a while, you can see it’s really, really sloppy.
As I read charts I look at them in this way, there is a base-building process and there is a markup. This would be the base, the markup phase is when a stock price is literally marked up and that would be this part, right here. And then there is the distribution phase, and that is when it runs sideways here. Wherever it’s going to be, that’s the distribution phase. And then finally we’re going to have a markdown phase, kind of like what we had here.
What we are talking about here on these phases is, base, markup, distribution, markdown, base, markup, etcetera, etcetera. So with that as our construct, we can see this stock just starting to break out. It had a nice move today, I’m doing this on a Friday, it had a nice move today, almost 8 percent. The volume, more than twice average volume, so this is doing really, really well.
What I am saying is that this stock was in a volatility squeeze. The Bollinger Bands, about 6-7 percent wide, which is actually pretty narrow, particularly for an IPO like this. And so the stock has broken out of this volatility squeeze. And in this type of situation, you are typically going to see moves go further. They are not just going to be these 1-day things that turn around and rip your face off. They are actually ones that will just kind of keep going.
What I would suggest doing on this thing is, watch how this trades on Monday. The high of the day today was 272.00. If this stock starts running at all above 272.00, I think you can buy it, and I’ll say it, probably look for even $300.00 as your target, that seems about right to me.
Free Chart