Snap stock's bullish 'breakaway gap' suggests first uptrend may have started
In one fell swoop, Snap Inc.'s stock hurdled its 50-day moving average, its 200-day MA and a 9-month long downtrend line, creating a bullish "breakaway gap" which suggests it may have launched its first uptrend since going public 11 months ago. The stock had bouncing around a relatively narrow range since it closed at a record low of $11.83 on Aug. 11, 2016. On Wednesday, after the ephemeral-messaging company reported late Tuesday quarterly results that beat expectations for the first time, the stock opened at $17.15, above its 50-day MA at $14.60, above its 200-day MA at $15.80, above a downtrend line starting in May that extended to about $14.65 and to trade above its IPO price of $17 for the first time in seven months, before extending gains. "Breakaway gaps occur when price suddenly breaks through a formation boundary and signal the beginning of a trend," according to a report of a study conducted by the Market Technicians Association. "These are thought to be the most profitable gaps [to trade]." It was up 46% in afternoon trade, the biggest-ever one day gain since it went public on March 2, 2017. It has climbed 36% over the past three months, while the S&P 500 has gained 4.5%.
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