Snowflake - shares down more than 20% in pre-market trade. Price should open around its 200MA, has the sell-off been overdone? Is a bounce back now likely?

Taking a look at Snowflake after it fell more than 20% in after-hours trading upon reporting its earnings. The company has also announced that it will be changing its CEO as part of its new business venture. As the market is closed, the shares closed yesterday’s session at $229.98 a share. However, in the pre-market trade, the shares are down 23.4%, or respectively, $176.50 a share. At the open, the share price should open in the area on the chart marked by the oval. This will also see the price open in and around the stock’s 200-day moving average. The news regarding the CEO change and revised future guidance has caused the reaction, however, big institutions such as Goldman Sachs and Wells Fargo have maintained their ‘buy’ rating on the stock with some stating that these losses may have been ‘overdone’ Therefore, it is likely that we could witness a short-term bounce here. The 200MA will offer support for the stock, with an engulfing close likely suggesting that in fact the sell-off could continue to as low as $145-$150. Towards the upside, the resistance is located around $192-$193. A move and close above this resistance would increase the likelihood of the stock then trying to close the now newly created market gap. The technical indicators in this instance cannot be referred to as they will most certainly open negative at the US open.

Earnings highlight:

Snowflake reported adjusted earnings of $0.35 per diluted share for the three months ended January 31, up from $0.14 in the same period last year, on $774.7 million in revenue, up from $589.0 million. That exceeded analyst projections of $0.18 on $760.6 million in revenue.