Live Snap Chart and Prices
Why I Have Shorted the Snap Share PriceThe chart looks terrible and I’ve had a small £0.50 per ¢ short of the Snap Inc. stock at $14.03.
I.e. with this spread bet I will make £0.50 for every $0.01 (1¢) the stock falls below $14.03 and I will lose £0.50 for every 1¢ the stock moves above $14.03.
Why Short Snap?For a more in-depth look at the +1,170,000,000 shares in-play see Snap’s IPO explained.
Shorting SnapWhere to close my trade? We are well below the $17 IPO level and there are no historic support levels.
If there was a downward triangle formation then we are already through that support.
Adding an Ichimoku Cloud overlay to the chart shows we are well below the cloud and in classic selling territory. If a price is below the cloud, then the market is deemed to be in a downtrend.
Trade Set-upThis is an unusual trade set up because there would normally be support and resistance levels to help guide my entry and exit points.
Likewise, the company fundamentals are a million miles away from the current valuation, so I can’t go on the fundamentals for my entry and exit points.
For the avoidance of doubt – the above is not advice.
1 August 2017: Short Trade UpdateThe stock is in a nasty downward channel:
I have tried to pop in and out of this trade, i.e. trying to sell on any price rebounds (I certainly don’t want a long trade).
There has been solid selling on open on a few days… but not every day… and I would have made more if I just kept my original trade.
Anyway, I still have my small short trade and my latest short is at $13.14.
2 August 2017: New Short TradeI was £0.50 per ¢ short of Snap.
I’ve put in an order for another £0.50 per ¢ short of Snap at $13.06.
The chart above (see 1 August update) is showing a strong downtrend and more stock could hit the market in 14 Aug 2017.
At $13.10 the market cap is $15.44bn.
Is it a $15.44bn firm? I don’t know.
Could it be a $10bn dollar firm? Still no idea, that’s just an arbitrary number I’ve picked… but if it’s a $10bn dollar firm then the share price should drop to $8.42.
Still aiming for $12.00 but will judge the selling / chart accordingly.
I’m keeping my stops pretty wide, this could be rocky ride.
4 August 2017: Profits, Mistakes and New Short TradesOK, I got a little excited yesterday and made a mistake after the Limit orders triggered nicely.
The market gapped on the open and then the share price continued to drop to $11.90. That triggered the Limit orders at $12.10 and $12.00 which booked profits on both short trades.
The trade sizes were small but we’ve booked shorts from $14.03 and $13.06 all the way to $12.10 and $12.00 = about 300 point profit. Lovely.
(I did close/open on 1 August and lost about 40 points on that error. School boy.)
The MistakeAfter the drop to $11.90 the market was then kind enough to bounce back to $12.50 before I looked at new spread bets.
I got excited and added a new £1 short $12.52 and, when the market was at $12.70, I set an order for a £0.5 short at $12.50, that has triggered.
I’m now roughly £1.5 short at $12.51. I don’t mind increasing my trade size in a bet that’s going my way. Who would?
The mistake was to get excited and just shorting the market. I should have taken a quick look at the chart.
The original downward channel is holding fairly well as a guide.
Tip: Use charts that save your data. I’m using Financial Spreads for this trade and the charts are handy because they save the trend lines. IG and CoreSpreads charts also do this. Others may too.
I shorted in the middle of the channel which isn’t a great place to trade but at least it was a short in a down channel
Anyway, the market continued higher and the net position is still £1.5 short at $12.51. With the market closing around $12.94, i.e. we’re holding a 44 point loss.
Stay on target, stay on target…
Next?I still expect the share price to drop. More stock could hit the market a week on Monday… if you held stock you’d want to cash-in some of that.
Likewise, the poor fundamentals do not show a $15.5bn company.
I expect a rocky ride down. The £1 short $12.52 has a Limit order at 1205 and £0.5 short $12.50 has a Limit order at 1105.
Tip: I like Limit orders just inside/outside psychological support/resistance round numbers so they are more likely to trigger. I don’t mind giving up a few points for that.
Warnings for this Trade
7 August 2017: That School Boy Error Comes BackAs covered on Friday, I made a mistake when opening a new £0.5/pt trade at the wrong point. The market then moved against my new bigger trade.
I’ve done the sensible thing and closed the new £0.5/pt trade. But that cost me 100pts i.e. £50 which is annoying.
That’s what happens when you rush into trades.
Still holding a £1/pt short of Snap.
A Big 7 Days for the Snap StockIt should be a big week for the stock and the theory suggests more selling.
The 4-hour chart with an Ichimoku Cloud overly, see below, shows we are still below the cloud and that suggests a downward trend.
The picture on the 1-hour chart is unclear.
Shorter timeframes suggest the price will be moving higher in the immediate-term. That’s if the market follows Friday’s trend where the bears will have felt an uncomfortable squeezing sensation.
Be careful with this one. Be very careful.
Watch Out: Company DataTime to be very careful with this one. If you must trade, keep trades small.
10 August 2017: Snap, Crackle and Flop?The Q2 report is due after the market closes tonight.
Taking another look at the poor Q1 numbers, one of the big headline numbers was the $2.2bn loss but $2bn of that was stock-based compensation so let’s take that out as it shouldn’t apply to Q2.
Q1 SummaryIt’s not that Snap is a bad company, or Snapchat is a bad product, the issue for me is the incorrect valuation of the company.
As well as the above:
Warnings Before You Place a Chunky Sell TradeThe picture is gloomy and it means that’s very difficult to see how Snap is a $15bn company.
However, before trading, the bears should also think about:
10 August 2017 Health Warning: Unexpected Chart Data!I really don’t like yesterday’s 5 minute chart that is showing a lot of buying @ $13.5.
With the average daily volume at 22m shares, it’s not the easiest stock to manipulate.
5 Minute Chart for 9 August 2017
If you open a 5 minute snap chart and scroll through then you can see other periods of similar buying once the market has been open a few hours. But it’s still not a nice thing to see when you are short.
More Warnings for Bears
Warnings for BullsThe Q1 numbers were poor to say the least. On a fundamental level it’s not a $15bn company.
Let’s say it’s a $1bn company and the share price is adjusted accordingly… that’s a 93% fall…! Please be careful.
My Next Trade?I am wary about my current trade.
10 August 2017 (8pm UK time): Fold!The Snap stock is still stuck around the $13.50 and that makes me uneasy going into tonight’s earnings.
Closed £0.50/pt of my short at $13.54 and taken a £50 loss on that.
That only leaves me £0.50/pt short of Snap Inc. Adjusted Stop Loss to $15.60 and Limit Order to $11.10.
I still think the Q2 data will be uninspiring but playing it safe and reducing my risk.
11 August 2017: Q2 and the Next Move for My Snap Spread Bet
We’ve taken a longer look at the Q2 numbers here: Miserly Growth Not Helping Q2 2017 Numbers for Snap
Or… you can read the official Snap Q2 2017 numbers here.
My Next Spread Bet on Snap Inc?The above numbers still don’t suggest a $15bn company.
The growth number is showing a continued slowdown in growth and yet they burn through cash.
It’s a shame I closed £0.50/pt short of Snap Inc. yesterday but that was prudent given all the strange buying at $13.50.
I’m now only holding a £0.50/pt short of Snap with a Stop Loss at $15.60 and Limit Order at $11.10.
I’m currently planning to see how the market reacts at the open.
I’d expect a sharp fall and some volatility on the open.
If there’s continued selling then I might take a new £0.50/pt short but I’ll probably keep tight stops on that.
Out of Hours Trading Gives Useful Guide on Snap Open
IG has a useful out-of-hours market on Snap. The spread can be wide but that can be acceptable. Worst case it’s a good guide for the open.
The IG Snap “all sessions” market closed at $11.87 – $11.94.
That’s a very large 13.5% fall.
It’s tempting to take that kind of level on the open, i.e. close for a nice profit.
… and then sell again if there’s a bounce.
(don’t forget, more stock could hit the market on Monday).
14 August 2017: Time to Think About Exiting this MarketAs discussed, the IG Snap “all sessions” market which closed on Thursday at $11.87 – $11.94 was a pretty good guide for the Snap open on Friday.
The main market gapped lower and opened at $12.01. It then seemed to trade in a cautious and tight range between $11.80 and 12.30.
I closed my £0.50/¢ short at $12.06 for a +40 point profit. And then, as discussed above, with the market bouncing I opened a new £0.50/¢ short $12.25. So far so good.
With more stock potentially hitting the market today there is more downside potential and the chart below is showing a solid decline.
Note, I’ve adjusted the channel, it’s now a very wide channel. There’s plenty of room for a bounce, hence I’ve only taken a £0.50/¢ short (wide Stop at $16.00 and Limit order at $11.50).
If the market bounces to the $13.00 – $13.50 area then I’ll ponder another £0.50/¢ short. Right now I don’t want to overextend myself.
This is Not a Long-Term Trade for MeI think we could see more downside this week but I will probably get out of the market this week too.
Once this week ends there will be a lack of data and therefore the number of unknowns increases.
Also, tech stocks are notoriously difficult to predict so I’d rather play it safe and exit… unless a strong down trend continues throughout the week, if so, I may continue to hold a £0.50/¢.
17 Aug 2017: Snap Spread Bets End on a WhimperAs many predicted, Snap gapped lower over the weekend and opened at $11.50, that was good news for my £0.50/pt short at $12.25.
The market then continued lower to $11.28 before bouncing very quickly.
I happened to be looking at the live chart and the speed of the bounce looked very aggressive.
I managed to close at $12.09 and a miserly profit of ($12.25 – $12.09) x £0.50/pt = 16pts x £0.50/pt = £8.
That’s a lot of work for a pint and some peanuts.
That chart has since continued higher and broken my very wide channel.
Market Not Behaving as Expected = No More Trades for NowI wasn’t expecting such a strong bounce. Especially with such week fundamentals (see Q2 data above).
Snap Inc. is now acting like a classic tech stock, i.e. defying gravity and all reason.
Therefore, I doubt I’ll be opening any new Snap spread bets soon.
At least we’ve had some nice trades since 1 August 2017 and a healthy overall profit.
There is an interesting move in the gold market though.
Where Can I Spread Bet on Snap Inc?IG, CMC Markets, Financial Spreads and CoreSpreads have markets. Plus 500 also have a CFD market.
It may take a little time for the other brokers to wake up.
Note that shorting the stock will probably be limited for some time.
The spreads and CFD firms often limit shorting after IPOs, it’s easy for them to layoff long positions but almost impossible to layoff a nasty short position.
Video 25 July 2017: Snap Shares Lock-Up ExpiryBelow, a short video from IG on 25 July 2017 looking at the expiry of the IPO lock-up:
13 July 2017: A Good Example of a Risk with Spread BettingSnap has given a textbook example of how a couple of ‘gaps’ in this week’s volatile price movements can hurt investors.
See ‘snap gap’ charts.
11 July 2017: Lead Underwriter Downgrades Snap StockMorgan Stanley, Snap Inc.’s lead underwriter for the IPO, has downgraded the share price only 4 months after the messaging firm listed on the stock market on 2 March 2017.
The stock IPO’d at $17 and briefly hit a high of $29.38.
It’s barely traded above $24 since 7 March and it’s been trading below $20 since 8 June.
It’s now seen a quick drop through the $17 IPO level to trade around $16.
There doesn’t seem to be much love for the stock and there could be more selling with the expiry of the stock’s lock-up period on 29 July.
Snap Market Capitalisation
It’s still “worth” around $18bn.
For more see Reuters: Snap shares drop after downgrade from lead underwriter Morgan Stanley.
11 May 2017: SnappedSnap inc. lost $2.2bn in market cap yesterday.
But according to Chris Beauchamp at IG Index, all is not lost.
“If Snap’s story is user growth, then at least they are delivering on that front.
“The userbase has risen 36% year-on-year and 5% on the last quarter.
“Now that the initial hype has subsided, will some see this as their chance to invest?”
Err… I do appreciate the IG analysts needing to give a balanced opinion but the market cap is still a whopping $28bn and that’s huge in comparison to the revenue stream.
3 March 2017: What’s the Worst that Could Happen?There was a good comment today, from Michael Hewson, Chief Market Analyst, CMC Markets.
“The level of enthusiasm for a tech firm that remains a long way from being profitable and has little in the way of assets remains somewhat surprising.
“The Snapchat app maker now has a larger market cap then eBay, what can possibly go wrong?”
Snap Chat Amongst the Pigeons?Snap Inc IPO’d yesterday, 2 March 2017.
The IPO got off to a cracking start and the shares traded 44% higher.
That makes Snap’s IPO the biggest since 2012.
Will it be another Twitter or Facebook, only time will tell?
(…although the lack of profits might give canny investors a wee clue…)
It’s tempting to short the US tech firm but the market is far too volatile right now and it’s probably best to wait… particularly with the IG chart below showing a rather buoyant market.
The Snap IPO Had the Power