SnowFlake is a data warehousing platform that allows users to combine and analyze cloud data from most major cloud platforms. SnowFlake has also been increasingly establishing its presence in the artificial intelligence domain (AI).
The data warehousing company has acquired nearly four AI-based companies since the beginning of 2023 and these are Myst AI, Snowconvert, LeapYear Technologies, and Neeva.
SnowFlake’s stock price started its bullish rally in the month of March, rising from the low of $129 and forming a high at $185. The price closed at $184.50 and the price fell to form a support at $146. The stock’s price then gained bullish momentum to retest the highs but again received resistance from the same level and fell to $167.50.
After forming the support at $167.50, the stock price gained bullish momentum and the previous candle was able to break the resistance. A break and close above the resistance level of $185 has confirmed that a bullish sentiment is rising in the market.
Downside To SnowFlake’s Valuation
SNOW stock price is headed toward the $200 level and has shattered the previous annual high of $185. If the bullish rally continues, there is a possibility that the price might wreck the September 2022 high of $205.66. If the price encounters a rejection at the $200 level, it could potentially decline to $185 as a retracement to establish support before continuing its upward trajectory.
The downside to SnowFlake stock valuation is its high price to sales ratio which is around 25. As Snowflake is in a high growth mode, the price to sales ratio is a better measure than price to sales ratio. The P/S ratio is much higher than other big tech companies in the cloud industry.
Will SNOW Stock Rise Above $200?
SNOW stock traded above the 20,50,100, and 200-day EMAs, indicating strong bullish momentum in the price. The Chaikin money flow score is 0.16, suggesting strength in the market. RSI trades at 64.41, denoting an increased participation of bulls and the price gaining bullish momentum. The 20-day EMA of the bollinger bands acted as support for the price and will soon reach the upper band of the bollinger and might receive a short-term pullback.
Conclusion
The market structure and price action for SnowFlake is bullish. The technical indicators are favoring the buying side. The previous quarterly report has shown that the company was able to beat the consensus estimates of revenue and earnings per share. However, shares fell by approximately 16% but the investors are gaining interest as Snowflake is investing more into Artificial intelligence since the start of 2023.
Technical levels
Major support: $167.50 and $146
Major resistance: $200 and $243
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/06/18/snowflake-snow-stock-rallied-post-earnings-report/