Despite some recent struggles to break above the $160 level, Snowflake (SNOW) stock is trading well below its February bear gap and is down 20.5% since the beginning of the year. Technical analysis shows that SNOW is now one standard deviation from its 50-day moving average, indicating potential trouble ahead. In fact, historical data suggests that the stock could see further losses in the coming month, with an average loss of 6.1% in similar instances over the past three years.
Furthermore, a potential downgrade from analysts could pose headwinds for SNOW, as 29 of the 41 analysts covering the stock still have a “buy” or better rating on it. The consensus 12-month price target of $218.36 is significantly above current levels, leaving room for potential price target cuts. Options traders are also heavily biased towards calls, with a 10-day call/put volume ratio ranking in the 90th percentile of its annual range.
Options could be a good way to play SNOW’s next move, especially considering the stock’s Schaeffer’s Volatility Index (SVI) of 40%, which is in the low 17th percentile of its annual range. This suggests that options traders are pricing in low volatility expectations at the moment. Despite the potential challenges ahead, there is still room for optimism as the stock navigates its current technical and fundamental factors.
In conclusion, Snowflake (SNOW) stock faces some technical trouble as it struggles to break above the $160 level and trades well below its February bear gap. Historical data and technical analysis suggest the potential for further losses in the coming month. Analyst downgrades and high call bias from options traders could also pose challenges for the stock. However, options trading remains an attractive strategy given the low volatility expectations and room for optimism in SNOW’s future performance. Investors will need to carefully monitor these factors to make informed decisions about the stock’s next move.
