Twitter Inc (NYSE:TWTR) reported its latest batch of earnings on Wednesday before the start of trading. Even though the company reported better-than-expected results, TWTR stock fell 2.4% for the day as investors showed some concerns around the outlook. Still, the stock is now sitting on a well-defined technical support level where active investors and traders could look to place long-side swing trading bets.
When talking about Twitter I would be remiss not to highlight that plenty of investors I speak with on a daily or weekly basis yesterday were also waiting for Facebook, Inc. (NASDAQ:FB) to report its earnings after the close on April 25, and more importantly any commentary it had around its data privacy issues of late.
One key point of distinction between Twitter and Facebook as it relates to user data privacy in my eye is that the data on Twitter is already public. In other words, the data that Twitter sells are statistics around public data … not personal data such as may be the case with Facebook. And indeed, Twitter CEO Jack Dorsey reiterated this very fact on the conference call on April 25.
Twitter Stock Charts
Moving averages legend: red – 200 week, blue – 100 week, yellow – 50 week
Moving over to the charts, we see that TWTR stock traded with a heavy tone, i.e. lower, from 2014 into early 2016. By early 2016, however, downside momentum began to wane and the stock started building a big technical base that I marked with the blue box.
Then in February 2018 the stock staged a notable breakout that pushed it out of the basing period as well as above its red 200-week simple moving average. Since then the stock has been backing and filling but notably holding above the basing pattern.
Moving averages legend: red – 200 day, blue – 100 day, yellow – 50 day
On the daily chart, we see that TWTR stock since November 2017 has been pushing higher along a simple support line. This line once again held in early April as well as yesterday following the earnings report. At the current juncture, this line also coincides with the stock’s blue 100-day simple moving average.
From a momentum perspective, the stock is showing signs of potentially gaining upside momentum.
In my eye and following yesterday’s post earnings drop that however saw TWTR stock close the day well off the intraday lows, what is still missing is a follow-through buying day to allow for better probability swing trades to the upside.
Less risk averse traders however could look to buy some stock around the $30 area, using a stop loss around $28 and a first upside profit target around $32.
Keep in mind however that TWTR stock can be a volatile one, which is to say that position sizing should be conservative.
Check out Anthony Mirhaydari’s Daily Market Outlook for April 26.
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