Social media powerhouse Twitter Inc (NYSE:TWTR) looks to be flashing a noteworthy bull signal, just one day after dropping on a price-target cut out of Moffett Nathanson. Below, we will take a look at how TWTR has been moving on the charts, and why now looks to be the perfect time to jump on the tech name's next surge higher.
Per data from Schaeffer's Senior Quantitative Analyst Rocky White, Twitter stock is trading within one standard deviation of its 80-day moving average, after a lengthy stretch above this trendline -- defined for this study as the stock being above the trendline 60% of the time in the last two months, and in eight of the previous 10 trading days. There have been six other times the security has made similar pullbacks in the past three years, resulting in an average one-month gain of 16.1%, and 80% of the returns positive. Based on its current perch at $36.21, another move of this caliber would put the security above $42 -- territory not seen since last July.
Another pop could prompt analysts to upwardly revise their outlooks, which may draw buyers to the table. While 18 of 26 analysts maintain a "buy" or better rating, the average 12-month price target of $39.90 is a slim 9.5% premium to current levels.
Those wanting to bet on Twitter's short-term trajectory may want to consider a premium-buying strategy. The stock's Schaeffer's Volatility Index (SVI) of 37% ranks in the 8th annual percentile, meaning near-term options are pricing in relatively low volatility expectations at the moment.
Plus, the equity has consistently rewarded premium buyers over the last 12 months. Twitter stock's Schaeffer's Volatility Scorecard (SVS) stands at a lofty 98 out of 100, which shows the shares have regularly exceeded options traders' volatility expectations over the past year.