Social media stocks have been on the rise in the stock market over the past 3 trading sessions including Meta, Alphabet, Snap and Pinterest after Senate Democrats and Republicans introduced a bill that would give the administration new powers to ban Chinese apps that pose security threats, including the popular video-sharing platform TikTok.
Among these stocks, Snap Inc (NYSE: SNAP) owns Snapchat, a social media platform that connects users through visual communication and storytelling and could be poised to be the biggest beneficiary since it offers more or less the same features as TikTok. The stock jumped 22% this week and gained more than 40% this year. However, the stock slightly reversed from the highs and closed almost 6% lower on Wednesday.
TikTok has over 100 million active monthly users in the US and at least 10,000 employees across the US and Europe, its parent company, ByteDance, is headquartered in Beijing, China. TikTok has been under the target of US lawmakers and politicians due to concerns over user data being sent to China. Last week, the U.S. House Foreign Affairs Committee advanced legislation that would give President Joe Biden the authority to ban TikTok in the U.S. due to national security concerns.
“We appreciate that some members of Congress remain willing to explore options for addressing national security concerns that don’t have the effect of censoring millions of Americans, a U.S. ban on TikTok is a ban on the export of American culture and values to the billion-plus people who use our service worldwide.” - Brooke Oberwetter, a spokesperson for TikTok, said.
$SNAP short-term technical outlook
$SNAP has a 52-week low of $7.33 and a 52-week high of $39.80. Technically the overall momentum remains mixed, but we can see that the stock well rebounded in recent days. This recovery saw the shares jump to a high of $12.60, which was the highest level in months. Therefore, the stock will likely continue rising as buyers target the key resistance levels at $15 and $15.80. A drop below $9.60 will invalidate the bullish view.
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