TWTR Twitter Daily Chart Upward-Sloping Channel Negative Divergence Developing

Twitter drama is all the rage lately. We were looking for the initial spank down in the low to mid 60's but instead price exploded to 75 in a Caligula-style orgy before the initial spank down. Traders were tripping over each other to chase the move higher as evidenced by the volume candle. As mentioned last week, TWTR is in its infancy as far as technical analysis goes. The stochastics and money flow create the smack down on Friday but note how the RSI and MACD line want to see another matching or higher price high since they are long and strong. The RSI hit uber overbot territory and had to retreat to simply take a breather. Note the strong support area at 55-60 and the 20-day MA is at 54.17 moving up into this zone to form a stronger confluence of support. The upward-sloping channel is in play and price sits at the bottom rail to begin the new week of trading.

The expectation is for price to come back up to 75-ish again. At that time the red lines in the margin for the indicators should all print negative divergence and seal the downside for days and weeks ahead. If price loses the bottom channel rail at 63.50-ish a test of the 60 support is likely. The current status does not provide a trading opportunity since if you go long to play the move back up, price may drop down to the 20-day MA first, or, if you go short, price may bounce immediately and move up to 75. The safe play is simply to watch and wait to see if price comes back up to 75 this week or next. At that time, verify the neggie d and that would create the short opportunity. At this writing about 3 hours before the opening bell, TWTR is dropping -2% to 62.50. TWTR provides an opportunity for a long from 55-60 back up to 75-ish. Then a short from 75-ish. Keystone holds no position in TWTR and does not plan any at this time. 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 10:16 AM:  TWTR tests the initial support at 60.00 as this is typed.