Trade of the Day: TWTR Stock Could Fly 30% Higher

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Twitter Inc (TWTR) — I recommended TWTR stock as the Oct. 9 Trade of the Day based on a bullish chart pattern, along with the company’s ability to double its revenues since its November 2013 IPO and finally turn a profit.

On Oct. 13, the social media company announced it would lay off up to 336 employees, or about 8% of its workforce. New management said the restructuring is part of a plan to increase efficiency and savings will be invested in growth areas.

Twitter also preannounced it expected Q3 revenue and earnings to meet or exceed the high end of its previously projected range. The company is scheduled to report quarterly results on Oct. 27.

The news prompted S&P Capital IQ Equity Research to reiterate its “strong buy” on TWTR stock.

As I mentioned earlier this month, shares completed a “W” double-bottom reversal from a bear market that began in late April at over $55.

Following my buy recommendation, TWTR stock broke from the “W” into a bullish “flag.” The top of the flag is at Monday’s high at $31.60. The formation is supported by higher-than-average buying volume and very low selling volume.

Initial resistance is at the 200-day moving average at $37.70. If the company delivers a strong earnings report next week, we can expect this resistance level to be pierced.

Buy TWTR stock at the market with a short-term trading objective of $40 for a potential gain of almost 30%. Traders should enter a stop-loss order at $28.

Investors may also want to buy shares as a long-term hold in the information technology sector.

TWTR Stock Chart
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Article printed from InvestorPlace Media, https://investorplace.com/2015/10/twitter-inc-twtr-stock-trade-of-the-day-2/.

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