Monday, December 23, 2013

TWTR Twitter Daily Chart Negative Divergence Developing

The money is chasing the high-flyers right now to end the year as evidenced by the dropping NYHL (showing less new highs with each market push higher) but stocks make new highs. There is a narrower and narrower group of stocks receiving all the love like TWTR, FB, GOOG, NFLX, biotech sector, etc.., you know the usual suspects. When these high-flyers crack, likely in the days and weeks ahead, that will likely signal the much-awaited market pull back. Twitter is a babe in the woods still yet only trading for 7 weeks thus far so technical analysis is limited. Drilling down to at least display a few moving averages due to the limited data set, price remains extended above the moving average ribbon. The indicators are negatively divergend over the last week so a spank down is needed, perhaps to the gap (brown circle) but the long and strong MACD line will want to see another price high. Thus, price may want to print in the 2 blue bubbles and then roll over.

The technical analysis is limited since the stock is so young, but the projection is a pop to 60-62, then back down to 56-59, then back up to 60.00-62.80, then roll over for more extended downside. Keystone's 80/20 guideline says 8's lead to 2's so the move up through 58 hints at 62. The 59.80 print hints at 60.20 which was printed intraday on Friday. So you can be patient with the short side unless you want to try and time the drop (a short trade may be doable if TWTR spikes at the open) and be nimble to get out at the gap below. Otherwise, be patient and then once TWTR comes back up in the coming days, say above 61, a short position can be scaled into. Keystone has no position in TWTR and likely will not play it. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 11:32 AM:  Equities pop higher and TWTR jumps above 62. The above idea remains in place. The expectation is a move lower from these levels, now at 62.39, under 60, then price to come back up again for more 62+, then roll over for more extended downside. Momo stocks are always tricky to play. This is only for traders seeking the wild ride.

Note Added 4:05 PM:  All the high-flyers are up today, FB +4.5% and TWTR +7.7%. Twitter closing print is 64.63 and HOD 64.95. That's a momo stock for you. Same idea is in play, a jog move down back up then down again. Should now top at 65.00-68.20. The momo is not expected to move it higher than 68, but, if so, 68+ should lead to 72.

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