Twitter’s stock is seeing an increase in volume over the past couple days and has had a great run since late last year. A buddy of mine and I were texting today and he told me to take a look at TWTR as it made it on his radar. I did a quick look at the charts and found them to be interesting, so I will provide a quick analysis here.
Before the charts I wanted to point out the news that has twitter trending today.
If you aren’t familiar with Citron then you should be aware that they are a major influence in the market and usually for shorting stocks. The mere mention of shorting a stock by Citron will normally kill mid cap and smaller cap stocks and will leave a quick dent in even the blue chips. So take that information for what it is worth.
The weekly chart isn’t pretty and will likely be a volatile climb if it does in fact make a run. The bullish indicator here is that it broke resistance from late 2015 in the area of $25.14 to $25.16. After hours $TWTR is currently closer to $26.00 and tomorrow will be interesting. The idea for a long trade here is the stock holding old resistance as support, so be looking for a test of the $25.16 area. If Twitter can test and hold this level then I would be interested in attempting a trade with a stop below $25.16.
The daily chart looks really bullish and is currently trading in an uptrend channel. Purely looking at only the daily chart I would normally feel safer with an entry near the bottom of the channel especially considering the near vertical bounce it made. However, if we factor in both the resistance break on the weekly chart with the bullish uptrend on the daily chart we can build a strong case for a trade. I will note that the RSI on the weekly chart is currently 64.7 and the daily comes in at 55.67 both which are indicating nearly overbought.
The safest bet here is to give this newly formed resistance break time to test and maybe even retest. For a good foundation for a long trade we need 2015 resistance to become support and that will bring confidence to new buyers.
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Mark aka TheBossTrader