Thursday, December 29, 2016

TWTR Twitter Weekly Chart

Twitter serves as a punching bag these days. Many people make fun of the platform but those same detractors use Twitter every day. President-elect Trump tweets daily. Keystone called the Twitter bottom in May and price launched as expected. Back in the spring, Twitter was highly disliked kind of like now. Everyone was beating up on Jack Dorsey for running two companies (TWTR and SQ). Analysts said only a fool would buy the stock.

As that sentiment ran excessively negative, the green lines show the positive divergence that formed across all indicators. The falling wedge pattern is bullish. The RSI, stoch's and money flow were at oversold levels. Price was on the possie d launch pad and bingo, TWTR exploded higher. Keystone was out of the long trade far too early. Price kept on running higher to 25. Takeover rumors were rampant. The stock was heavily shorted so there was a short-covering rally creating additional upside oomph. It was a joyous run all summer into early Fall for the tweety bird.

However, ongoing poor earnings and executives continuing to leave the company, had traders hitting the sell button again and price gaps down in early October. Looking back at the positive divergence from earlier in the year, there is really no reason for price to come back down to the lows again. That set up was very strong. But price does leak lower as each day another analyst calls Twitter a POS (piece of sh*t).

Price may seek that lower band limit now at 15.44. This is also strong horizontal support. As stated, there would not be an expectation for price to come all the way back down to the May-June low although you never know. The stochastics are oversold. Twitter is probably worth playing on the long side especially since it remains a takeover target. One of the big league tech companies like Apple, Google, any of them, may grab Twitter as the price languishes. Of course if a takeover announcement occurs, there would be huge upside, depending on the deal.

Keystone has no position in Twitter and has not played it since the possie d launch from May into August. Keystone will probably buy TWTR on the long side in that 14.60-15.44 range. If it begins rallying before then, he will not chase it. But anything under, say, 15.50 is probably worth buying going forward. TWTR is placed on the potential buy list. 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 6:31 PM EST: Commentators and pundits are out in force this evening calling Twitter a piece of garbage. If you are long TWTR or contemplating a long position, that is music to your ears. TWTR is at 16.39. Price should move lower; wait until you see the whites of Twitter's eyes.

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