Snapchat's 2020 Comeback: There Were 2 "Writings on the Wall," But Only 1 Was Right
Our Elliott wave picture of Snapchat called for a tripling of prices -- back in April. And look at it now!
by Nico Isaac
Updated: December 29, 2020
In this brave new marketplace of just-add water startups, some say the days of long-term forecasting is long gone. The reason being, it's impossible to predict where these brand-new, Gen-Z stocks will be one day to the next as they're constantly in the line of fire of external factors like new product launches, increased competition, rampant scandals, lawsuits, and so on.
In turn, opportunities in these stocks come and go as rapidly as a picture sent through the vanishing photo app Snapchat.
Or, do they?
Let's take Snapchat while we're on the topic. This is a chart of the photo app's listed stock, SNAP.
After moving sideways pretty much since its 2017 IPO debut, SNAP finally snapped out of its road-to-nowhere trend and began climbing this April. By December, the stock had soared five-fold to record highs in a winning streak that blew its larger social media peers like Facebook, Twitter, and Instagram out of the water.
SNAP's incredible comeback has secured the praises of Wall Street's top analysts, who now say the vanishing app is here to stay. Said one December 10 Yahoo! Finance: "Buy Soaring Snap Stock for 2021 as Long-Term Tech Growth Play."
To call SNAP a long-term play now, after its killer 2020 performance, is like saying Lebron James is finally king of basketball -- AFTER his fourth NBA Championship win.
But what about before SNAP stole the social app show -- say, back in April? Then, mainstream analysts cited several bearish factors in SNAP's backdrop that would keep prices pinned to the mat. One April 2 Yahoo! Finance issued this warning:
"Snap Stock Has Been a Roller-Coaster Ride but It Still Isn't a Buy... Despite the anticipated increase in engagement, we do not believe the rise in usage will translate into higher revenues."
On April 17, The Street called SNAP's rally at the time "unjustified" and said:
"Snap's revenues are going to face difficult headwinds in the coming months, as the advertising market has lost significant strength owing to the coronavirus pandemic... Avoid this stock."
And finally, an April 17 Seeking Alpha article wrote:
"Snap: The Writing Is On The Wall, Get Out Before Earnings...SNAP is one of the worst positioned stocks in media."
But the Wall Street wall wasn't the only "wall" in town!
In our April 14 Trader's Classroom, editor Jeffrey Kennedy saw a different message being written on the price chart of SNAP; namely, a long-term bullish one.
On April 14, Jeff showed Trader's Classroom subscribers these two charts of SNAP. The first one identified an inverted head-and-shoulders bottoming pattern with a neckline measurement projection in the $34-36 range.
The second Trader's Classroom chart shows Jeff's Elliott wave count for SNAP, in which he identified a completed wave 1 up, then a wave 2 correction -- and now, in April 2020, a wave 3 rally. Jeffrey's outlook called for a tripling, at least, of prices from current levels:
"We're currently trading at $13 and change. If everything does go according to plan, you can see this issue trading about a third of what it would ultimately be trading as we move into the year. Keep an eye on this."
From there, after that bullish Trader's Classroom forecast, SNAP indeed began to slowly turn up.
In the July 9 Trader's Classroom, Jeffrey revisited his April forecast with this bullish update:
"What we were looking for has really come to pass. Boom! Look at this. We're already up to $26 and that neckline measurement actually calls for still further rally so don't be surprised to see this sucker continue to climb higher from here."
Again, SNAP continued to snap higher, reaching the $40 level by November.
Once again, the November 4 Trader's Classroom stepped in to guide the next leg of the advance. There, Jeffrey showed this labeled chart and said:
"The interpretation here is simple: we have more to go. So I will be looking for another $10 higher" in the coming month.
And, for the third time, for his third forecast, SNAP followed Jeffrey's analysis to a T.
In the end, unlocking the near-, and long-term set-ups in the world's leading markets requires the right key -- watching technical price patterns, not "fundamental" stories and angles.
Our Trader's Classroom delivers to subscribers new video lessons 3 times a week -- often with a built-in, ongoing real-market opportunity like the one you've just read about.
So, find out which names are on Jeffrey's action-oriented watchlist today! See below to get started.
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