Step-by-Step Technical Analysis of Snowflake Inc. (SNOW)

1. Trend Analysis

• Long-Term Trend (YTD): The YTD chart shows SNOW ranging from a recent low near $120–$130 in early April, followed by a substantial rally to above $205 in May.
• Recent Trend (Last 2 Weeks): Steep movement from $180s to $208, indicating a strong bullish trend.
• Short-Term (Hourly/Intraday): After peaking near $209.8 on May 28th, price has consolidated between $204 and $208, hinting at a pause or potential reversal.

2. Price Patterns & Structure

• V-Reversal (April): Price snapped back from sub-$135 levels to $150s rapidly, confirming strong dip-buying interest—possibly institutional accumulation.
• Rising Wedge (Current): The surge from $180 to $209 shows narrowing gains and slowing momentum, suggesting a rising wedge—an exhaustion pattern often preceding a pullback.
• Double/Triple Top (Intraday): Yesterday’s chart shows rejection at $209.8 multiple times, supporting resistance at that level.

3. Support & Resistance

• Key Supports:
  • $200 (recent high and round number, psychological level)
  • $195 (minor)—past resistance from May 22-23, should provide support if tested
  • $190 (prior breakout)
• Key Resistances:
  • $208–210 (recent highs, multiple rejections)
  • $215 (projected target if breakout occurs)

4. Volume & Order Flow

• Unusually High Volume on May 22 (~26M shares): Indicates institutional buying, possibly related to earnings/news.
• Volume Dropping as Price Rallies: Divergence between price and volume suggests less conviction in recent highs—a classic sign of weakening buying pressure.
• Intraday Volumes (May 28): Volume spiked at the open and on the drop from $208–$204, signaling sellers are emerging.

5. Momentum Indicators

• RSI (Qualitative, ~Hourly): Given explosive rally and consolidation near the highs, RSI is expected to be >70 (overbought), with potential for negative divergence (price high, RSI lower).
• MACD (Qualitative): MACD line likely above the signal, but histogram shrinking, suggesting momentum may be waning.
• Stochastics: High, likely rolling over.

6. Moving Averages

• 20, 50, 200D SMA:
  • Price is above all SMAs (bullish), but stretched >10% above the 20-day, which is often unsustainable; mean reversion risk.
  • On intraday chart, 20-hour MA flattening, signaling consolidation/topping.

7. Volatility Measures

• ATR (Average True Range): Surged post-earnings, now elevated (~$6-8 range daily), indicating high volatility—sharp reversals possible.

8. Gaps & Imbalances

• Gap Up (May 21–22): Price gap from ~$181 to $203; unfilled gap area could act as magnet if bears gain traction.

9. Relative Strength vs Peers/Indices

• Outperformed cloud/software peers and broad tech indices; extended performance can lead to profit taking.

10. Quantitative Patterns/Fibonacci

• Fibonacci Retracements:
  • The rally from $147 (April) to $209.8 (May) projects retracement targets—38.2% at ~$188, 50% at ~$178.
  • Immediate pullback target: $196–$200 (matching recent supports and fib zones).

11. Candlestick Patterns

• Doji/Spinning Top (May 28): Neutral sessions with wicks up/down show indecision—often a precursor to reversal or strong move after consolidation.

12. Option Flow & Implied Volatility

• Expected IV Elevated Post-Earnings: Suggesting more downside risk premium being priced in than upside.

13. Sentiment/Positioning

• Strong Recovery, Overextended: After a 55%+ rally in weeks, many traders likely profitable and vulnerable to a sharp pullback on any negative catalyst.

14. Synthesis & Final Prediction

• Current Setup: SNOW has experienced a massive rally, likely fueled by post-earnings momentum and short covering. However, technicals now show price running into clear resistance ($208–$210) amid weakening bullish momentum, overbought conditions, flagging volume, and potential negative divergence on oscillators.
• Bearish Short-Term Outlook: The probability of a corrective pullback to retest the $200 and potentially $196-$198 zone is high. However, buyers remain in force on sharp dips, so a deep drawdown is less likely unless the overall market drops or new company-specific negatives emerge.

Combined Takeaways:

• Primary Directional Bias: Short over the next 24h to capture a pullback before buyers potentially reload for a next leg up.
• Entry Zone: Favor short entries at $205–$206 (current market price slightly below resistance).
• Profit Target: Cover shorts near $198–$200 support zone within the next 24 hours as volatility remains elevated and buyers likely step in aggressively here.

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Summary:

• Current price action is extended and momentum is fading.
• Multiple signals indicate a short-term top, making a short position more attractive, targeting downside volatility in the next session.
• Maintain tight risk control in case of sharp reversals (stop suggested near $209/210).

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Conclusion: Open SELL (Short) at $205, Target $198.