Snowflake (SNOW) has been struggling to break over the $160 level for the past couple of months. The stock is currently trading well below its February bear gap and has seen a 20.5% decline since the beginning of the year. As the stock continues to face technical challenges, it is now one standard deviation from its 50-day moving average, with Schaeffer’s Senior Quantitative Analyst Rocky White defining this as the equity trading below the moving average for 80% of the time over the past two months. Based on historical data, the stock has seen seven similar signals over the last three years, with a 71% chance of being lower one month later in those instances, averaging a 6.1% loss.
Furthermore, potential downgrades could provide additional headwinds for SNOW, as 29 out of 41 analysts covering the stock still have a “buy” or better rating on it. Additionally, the 12-month consensus price target of $218.36 represents a 38% premium to current levels, leaving room for potential price target cuts. As investors and traders weigh their options, it is worth noting that optimism remains high among options traders for SNOW, with a 10-day call/put volume ratio ranking in the 90th percentile of its annual range, indicating a strong bias towards calls.
In considering Snowflake stock’s next move, options present a potentially favorable strategy, given 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 currently pricing in low volatility expectations. As the stock continues to face challenges in breaking above the $160 level and with potential headwinds from downgrades, options may provide a way for investors and traders to navigate the uncertain market environment surrounding SNOW.
Overall, SNOW’s performance in the market has been lackluster, with the stock struggling to gain momentum and facing resistance at key levels. With technical indicators signaling potential downside and with room for price target cuts, it remains to be seen how the stock will perform in the short to medium term. As investors and traders analyze their options, the low volatility expectations in the options market could present an opportunity to make strategic moves in response to SNOW’s current challenges.
