:max_bytes(150000):strip_icc()/SNOWChart-4b9f687367da41689132fd5d2943234d.gif "Watch these Snowflake stock price levels after the post-earnings announcement decline")
Key findings
- Shares of cloud data warehouse software company Snowflake fell 8% in extended trading on Wednesday after a widening net loss and rising costs overshadowed better-than-expected quarterly results.
- The stock price broke out of a falling wedge formation earlier this month, but that move appears to be being tested following the stock’s expected post-earnings decline.
- Snowflake shares could attract buying interest at key price levels such as $123, $108, and $95 on the chart.
Shares of cloud data warehouse software company Snowflake (SNOW) fell 8% in extended trading on Wednesday after a widening net loss and rising costs overshadowed better-than-expected quarterly results. In addition, despite raising its revenue forecast for the year, the company left its gross margin forecast unchanged, which may also contribute to the weakness after the close.
The Bozeman, Montana-based company’s stock, which has fallen about 43% from its 2024 peak through Wednesday’s close, remains out of favor with investors after the company appointed a new CEO in February and disclosed a cyberattack in late May that compromised data from several high-profile clients, including telecom giant AT&T (T) and TicketMaster parent Live Nation (LYV).
Below, we take a closer look at Snowflake’s chart and use technical analysis to identify key price levels to watch given the stock’s expected sell-off following the earnings release.
Falling wedge breakout put to the test
Since peaking in early February, Snowflake shares have formed a falling wedge, a chart pattern that signals a potential upward price move.
In fact, the stock broke out of the wedge earlier this month after rallying from its lower trendline. Volume rose slightly ahead of the company’s quarterly earnings release, suggesting investors were preparing for a move after the earnings release. However, that move appears to have been lower, with shares falling 8% to $124.23 in after-hours trading.
Given the decline following the earnings release, investors should keep an eye on three lower chart levels where Snowflake stock could attract buying interest.
Lower price levels for monitoring
The first is around $123, an area where shares could find support near the June swing low, which also corresponds to a range of recent prices near the upper trendline of the falling wedge pattern.
Failure to hold this level could result in shares sliding to the $108 area, potentially attracting buying interest near the low of the wedge pattern, which also marks the stock’s 52-week low.
If the stock eventually follows a similar downtrend to its last downtrend from early July to early August, the price could drop to the lower trendline of the wedge around $95. We forecast this by taking the bar pattern from the downtrend and positioning it from Wednesday’s high.
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At the time of writing, the author does not own any of the securities mentioned above.
