Snowflake (SNOW) has been struggling to break above the $160 level in recent months, trading well below its February levels and down 20.5% since the beginning of the year. The stock is currently one standard deviation from its 50-day moving average, indicating bearish momentum. Schaeffer’s Senior Quantitative Analyst Rocky White suggests that in similar instances over the past three years, SNOW has experienced an average loss of 6.1% one month later. This would bring the stock closer to its April lows around $148.
Despite the majority of analysts still maintaining a “buy” or better rating on SNOW, a downgrade could potentially create additional headwinds for the stock. The consensus price target of $218.36 is significantly higher than current levels, leaving room for potential price target cuts. Additionally, options traders remain optimistic, with a 10-day call/put volume ratio ranking in the 90th percentile of its annual range.
Options appear to be a favorable choice for investors considering Snowflake stock’s next move, with the stock’s Schaeffer’s Volatility Index (SVI) at a low 17th percentile of its annual range. This suggests that options traders are currently pricing in low volatility expectations. With SNOW struggling to break through key resistance levels and facing potential technical challenges, options trading offers a way to navigate uncertain market conditions.
In light of the technical indicators and potential headwinds facing Snowflake stock, investors may want to consider their options carefully. The stock’s recent performance and historical data point to a possible further decline in the near term. By taking advantage of low volatility expectations and the optimistic sentiment of options traders, investors can strategically position themselves for potential movements in SNOW’s price.
In conclusion, Snowflake (SNOW) continues to face hurdles in breaking above the $160 level and remains below its February levels. Technical indicators suggest a potential further decline in the stock price, with options traders remaining optimistic but potentially exposing themselves to increased volatility. Investors looking to navigate the uncertainties surrounding SNOW may benefit from options trading strategies that take into account the current market conditions and the potential risks and rewards associated with trading this stock.