TWTR Twitter Weekly Chart Sideways Triangle Breakdown Downward-Sloping Channel Falling Wedge Oversold Positive Divergence

The tweety bird is laying on its back with its feet up in the air. Remember a year ago as Keystone began highlighting the long-term sideways triangle pattern (red)? Price sneaked out to the upside earlier this year but it was a fake-out move. TWTR collapsed back into the red triangle and then out the bottom side. It was obvious that things would get ugly, and they did. The vertical side of the triangle is about 40 handles and the failure from the pattern occurs at 40 so this places price at zero but this will not happen. Twitter is a young stock and would need more months and years to play out to provide better data. The triangle breakdown simply indicated that price would collapse drastically and it did.

The green lines show a falling wedge pattern (bullish) and positive divergence occurring across all indicators. Indicators are at or near oversold (bullish). Price is under the moving averages requiring a mean reversion higher. The money flow has VST downside momo so that may create a quick jog move of up-down-up over the next couple-three weeks but the overall expectation is for a more sustainable recovery going forward. Price should move through the blue channel establishing a base. The monthly chart is sketchy but for now Twitter should base and recover sideways to sideways higher going forward. TWTR can likely be scaled-into on the long side starting now. Keystone does not currently hold a position in Twitter.

The broad consensus takes turn punching Twitter in the face each day. The majority of market participants are skeptical on the stock. No one appears happy at CEO Jack Dorsey's dual role at Twitter and point-of-sale payment service provider Square. The chart above hints that the worst is over and the tweety bird should stumble out of the nest and begin flying again. Twitter will probably be a big success story in 2016 but it may be weighted towards the back half of the year. As global events intensify and a thirst for real-time information is sought, people will flock to Twitter; it is a news service at its heart. Dorsey and others will likely find a way to monetize the site better and place the company on a firm footing. 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.