UPDATED - September 17, 2019
BotTrigger Trade Alert: $SNAP limit order set to add to our January 2020 $15 / $20 vertical call spread @ $1.75. MAX GAIN = $5 for a 185% gain so long as share price closes @ $20 or greater than UPON expiration. Our first entry on June 5th for $0.94 would bring our cost basis to $1.34.
SNAP has been cultivating a 2-month long bullish flag & is now at the precipice of breaking out above that channel / flag. The move today is occurring on strong volume with a bullish crossover on the daily MACD momentum oscillator which makes the setup easier for them to tease the asking price higher. This entire consolidation area on SNAP is best interpreted as a continuation pattern as it gears up for the next leg higher.
Original Post - June 5, 2019
BotTrigger Trade Alert (2): $SNAP bought the common stock here @ $12.98 & we've also purchased the January 2020 $15 / $20 vertical call spread for $.94.
The max gain on this spread is $5 which represents a 432% gain if SNAP's share price trades @ or greater than $20 per share upon Jan 2020 expiration which is 226 days away. The technical setup on SNAP really just looks beautiful here. On both the daily & weekly time frame we're seeing back to back accelerating volume with positive accumulation uptick. We have a 1-year long CUP & HANDLE formation where the resistance neckline is approximately around $14.50. SNAP just went through a retest phase w/ in this CUP formation which is also known as the HANDLE of the CUP & HANDLE. Sometimes the Handle is fleshed out before breaking above the neckline, sometimes after, and even sometimes you get a complex breakout pattern with multiple handles that occur before the breakout of the neckline & again thereafter, much like we saw with BABA when it building energy to break out of it's 3-year cup & handle pattern. Here's the thing, much like Facebook, advertisers are desperate to expand their reach potential to their target audiences. And like Facebook, SNAP's greatest earnings quarter will occur during the Holidays / Christmas period. We want to be buying SNAP now before the Holidays where we expect the big chase to occur sometime around late fall. For now we're keeping this position small with only a 3% allocation split between common & call spread position. We may look to add on the next pullback cycle.