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Why Twitter could mean the end of the tech rally

Talking Numbers

Twitter goes public this week but is it a sign that the tech market is topping out?

The NASDAQ Composite index is at levels not seen since 2000. Now, a high profile tech company is seeing huge demand from retail investors. And that has some investors worried we are in another bubble.

The most anticipated IPO is finally here: Twitter, trading under the symbol TWTR. The microblogging service is expected to go public Thursday at a price range of $23 to $25 per share, up from an earlier price range of $17 to $20. The sale of 70 million shares is expected add between $1.6 billion and $1.75 billion to the company's coffers. Well, that's before its investment bankers at Goldman Sachs, Morgan Stanley, and JP Morgan Chase all take their cut.

(Latest news: CNBC.com's coverage of Twitter)

In the 2,786 days since founder Jack Dorsey posted the world's first-ever tweet, the site gained more than half a billion accounts, with just a little less than half of those are active users. Over its short lifespan, it has become the world's town square, the platform for political revolutions, and the place where Kim Kardashian gets $10,000 just to type up to 140 characters pitching a product.

This inevitably leads to a comparison with similarly-ubiquitous Facebook, which had a controversial IPO in May 2012. After going public for $38 per share, Facebook shares dropped to half that price in just four months. However, the social media giant has more than doubled from those lows and traded above $50 last week.

"Twitter has been really conservative in how it's gone about the IPO process," says CNBC contributor Gina Sanchez, founder of Chantico Global. "Certainly, I think they used Facebook as a poster child for a terrible IPO experience."

But, while Twitter has been trying to manage the markets expectations for its own stock, things may be different for the tech market in general.

(Watch: Twitter IPO not worth all the hype: CNBC-AP poll)

"I don't think [Twitter] is at the top of its range," says Sanchez. "I think, generally, tech stocks are at the top of their range."

Talking Numbers contributor Richard Ross, Global Technical Strategist at Auerbach Grayson, agrees with Sanchez on tech stock prices, particularly when using the tech-heavy NASDAQ Composite Index as a proxy for the industry as a whole (However, Twitter will be trading on the New York Stock Exchange).

"When I look at the chart [of the NASDAQ Composite index], I am somewhat concerned," says Ross, who sees the potential for a pullback.

"Twitter is selling here. Remember that," says Ross. "They're selling it to you, they're not buying it from you. They're telling you that the time is right to be a seller, not a buyer."

To see more of the analyses on Twitter and tech by Sanchez on the fundamentals and Ross on the technicals, watch the video above.

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