Thursday, January 23, 2014

TWTR Twitter Daily Chart Sideways Channels Sideways Symmetrical Triangle

Twitter is interesting to watch as its technical parameters remain in infancy, the weekly charts far from providing any useful information. The 50-day MA is beginning to print since, obviously, TWTR is over 50 days old. Note the tight bands that squeezed out the sharp upside move in early December. Since price violated the top band, a move back to the middle band, the 20-day MA at 62.93, is in play, which occurred, as well as the lower band at 54.24. Note how the brown horizontal lines highlight strong price support so all these factors come together to form a strong confluence of support at 52-55. This will be a key level for Twitter moving forward. Failure at 52-55 will likely send price down to the 40 support.

When this chart was last posted to begin the new year, the expectation was for price to come back up for a matching or higher high which would create a very good shorting opportunity. Note how price was coming back up the first couple days of the new year but then, whammo, price is smacked by downgrades occurring over multiple days. Too bad the analysts could not wait for a couple or three days more for price to achieve 75+ again. This action now creates a funky sideways channel pattern through 55-70 with price hugging the 20-day MA; the robots latching onto this critical moving average as a guide.

The pink sideways triangle requires an up or down decision today and the move can be about 18 handles (the distance of the pink vertical line), hence, an upside breakout targets 75-80, and the downside break down targets 44-50. Suffice it to say the direction move today will likely either send price to 75, or down to 52.

The RSI and MACD line continue to want price to come back up to 75-ish (small green circles) since they were jipped due to the negativity caused by the analyst downgrades. The question is does price go down to test 52-55 support first, then back up to 75-ish, then down, or, does price come back up to 75-ish now and roll over to the downside? The stock does not provide an attractive opportunity right now. Perhaps a short can be placed once price prints 75+, or, if price drops to the 52-55 gauntlet, go long for a quickie recovery move, then short at 70+ after price recovers. Twitter will likely explore its identity through 40-70 for many weeks and months ahead. 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.

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