Snap Inc. (SNAP) shares rose more than 4% during Tuesday's session after Susquehanna upgraded the stock to Neutral and raised its price target to $18.00 per share. Analyst Shyam Patil believes that Snap could experience "solid" growth following advertising channel checks. Improved self-serve capabilities, benefits from the sales reorganization, and lower inventory costs were all responsible for improving the advertising outlook into the third and fourth quarters. Facebook, Inc.'s (FB) Instagram Stories have also "lowered barriers" for Snapchat's Stories adoption among advertisers.

The analyst believes that the company's guidance of 2 million to 4 million net adds for the third quarter and 4 million to 6 million net adds for the fourth quarter are "very achievable" and potentially "beatable." Android, augmented reality, and other product changes could also improve adoption. Despite the favorable outlook, the analyst maintained a Neutral rating on Snap due to the stock's relatively high valuation compared to its peers. 

Chart showing the share price performance of Snap Inc. (SNAP)

From a technical standpoint, the stock broke out from trendline resistance and the 50-day moving average at $16.00. The relative strength index (RSI) remains at neutral levels with a reading of 56.17, but the moving average convergence divergence (MACD) could see a near-term bullish crossover. These indicators suggest that the stock could have a lot more room to run over the coming sessions if the breakout holds.

Traders should watch for consolidation above the 50-day moving average and trendline support before a move to retest prior highs of around $18.50 over the coming sessions. If the stock breaks down from support, it could retest reaction lows of around $14.50 before making another attempt higher. The favorable analyst comments and improving MACD could create a bullish bias for the stock over the coming weeks.

The author holds no position in the stock(s) mentioned except through passively managed index funds.