Shares of Snap Inc. are traded at a discount of 3.7% to the monthly maximum, strengthening since the middle of last week. Since the beginning of the year, the emitter’s quotes grew by more than 190%. Following the results of the last quarter, Snapchat showed an increase in active users by 3.2% compared to last year, which is the best among competitors, Facebook and Instagram. The Wall Street expects this trend to continue in Q3 with an increase in the subscriber base to 206 million active users.
Last week, Snap Inc. share price decreased by 3.73%. S&P500 went up by 0.94% within the same period.
If the price consolidates below the support level of 14.75, #SNAP shares may correct. Potential profits should be locked in by orders at 13.50, 12.50, and 11.50. Stop loss – 16.00.
If the price consolidates above 16.60, one may consider buying the company’s stock. The moving potential is aimed at the area of 18.50–19.50. Stop loss – 15.50.
Implementation period: 3 days.
Support and resistance
The emitter is still in the side movement. No single direction tendencies are observed. At the moment, the following key levels of support and resistance can be distinguished: at 14.75 and 16.60, respectively. In the near future, correction of the company’s shares after a protracted growth cannot be excluded.
Indicators don’t give a clear signal: the price crossed MA(50); and MACD has approached the zero line. Positions are to be opened from key levels.
Comparing the company’s multiplier with its competitors in the industry, we can say that #SNAP shares are neutral.
Support levels: 14.75, 13.50, 12.40.
Resistance levels: 16.60, 18.00.
All Eyes Are On China
China’s economy went into more delay in August, and the industrial production grew at the weakest pace in more than 17 years; Industrial production rose 4.4 per cent / y in August, the lowest since 2002 and slower than the 4.8 per cent growth in July, the DBS Research Group reported.
Fixed asset investment rose 5.5 per cent YTD, down from 5.7 per cent the previous month. Infrastructure investment has been accelerated but not sufficient to offset the slowdown in private investment. Retail sales grew to 7.5 per cent, compared to 7.6 per cent in July. Sales sales fell by 8.1 per cent after a decrease of 2.6 per cent the previous month.
Leadership indicators showed mixed symptoms. Caixin PMI’s manufacturing increased to 50.4 in August from 49.9 the previous month. However, trends in supply and demand, and increased output but falling new orders, varied. In particular, new export orders reached deeper into a contrasting territory.
Demand for credit was unsympathetic and uncertainty was increasing. The growth in total social funding remained at 10.7 per cent in August, while the growth of loans increased by 0.2p to 12.4 per cent. To date the impact of targeted policy mitigation has been limited.
Since the beginning of 2018, PBoC has exceeded RMB3.6 trillion to clean liquidity by seven backup culling. However, the funding costs for the real economy failed to decline. The weighted average lending rates were not changed to three quarters (5.66 per cent for Q2 2019; 5.69 per cent for Q1 2019; 5.64 per cent for Q4 2018). M2 remained historically low, although up to 0.1pp to 8.2 per cent in August.
“We hope that Beijing will try to put the economy down. but it is unlikely to be used as a short-term method to stimulate the economy in the light of rising house prices, ”the report said.