Shares of Twitter Inc (NYSE:TWTR) on Thursday rallied 4.25% in a move that further proved that its more constructive behavior in recent months may be for real. From a trading perspective TWTR stock now sets up for a well-defined next upside target.
Source: Christopher via Flickr
Shares of Twitter have largely been in a sea of pain following an initial post-IPO rally in late 2013. The company however increasingly seems to be turning itself around with a series of video partnerships and product enhancements such as an expanding of tweet characters. Also the still ongoing m&a talk around the company should not be discounted.
As a point of reference, when I last offered my take on TWTR stock on Nov. 27 I said that as long as any near-term pullbacks hold the $20.50 area on a daily closing basis, it should remain in good shape for a next leg higher toward $25.
The most recent pullback in late November/early December indeed held this area of support and a next move higher toward $25 could now be underway.
TWTR Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
On the multiyear weekly chart we see that TWTR stock in October began to pierce above the well-defined black diagonal resistance line and that this move thus far is continuing.
The relative strength index (rsi) at the bottom of the chart shows trending strength to the upside as well. As such from this angle barring any major news out of left field the stock remains on track to continue its thus far multi-month ascent.
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
The 4.25% rally in TWTR stock yesterday also came on three times average daily options volume and almost four times more calls being traded than puts.
Note that the most recent pullback from a couple of weeks ago held TWTR stock at the aforementioned area of support just around the $20.50 (on a daily closing basis) level where a bid for the stock once again came to fruition.
From here the next upside target remains the $25 area, which would also satisfy a gap fill (blue box) of a still unfilled down-gap from October 2016.
Check out Anthony Mirhaydari’s Daily Market Outlook for Dec. 15.
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