Snap Inc SNAP once again opened near the $20 level before bouncing in early trading. In its first couple of weeks, the $20 level has served as an important psychological support level for Snap traders, but it may face its first major test in coming days.
After pricing its IPO at $17, the stock peaked above $27. Since that time, it has been trending in the wrong direction.
It’s still early to determine clear technical resistance and support levels, but even numbers like $20 often serve as psychological support in the minds of traders. Traders often set stop loss orders or buy orders at or around round numbers like $20, making them important levels for stocks.
Related Link: Snap Is The Hottest Stock Among Short Sellers
If Snap does dip below $20 and stay there in coming days, the obvious next potential psychological support level is the IPO price of $17. Of course, Snap investors certainly don’t want to see the $17 level tested, as it represents another 15 percent downside ahead.
Wall Street certainly hasn’t thrown its support behind Snap since its debut. Here’s a summary of how major firms have rated the stock up to this point:
- Susquehanna- Neutral rating, $22 price target
-
Needham- Underperform rating
- FBN Securities- Sector Perform rating, $23 price target
- Cantor Fitzgerald- Underweight rating, $18 price target
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