New Lows for Downtrending Twitter TWTR

May 24, 2016: 10:05 AM CST

“Stocks that are weak (downtrending) tend to get weaker (keep downtrending).”

That quote is certainly true for “weak getting weaker” downtrending Twitter (TWTR) as price broke to a fresh new 52-week low this morning.

Let’s first start with the larger-picture downtrend (weekly chart) and pinpoint today’s new low:

After an IPO near $25.00 per share, Twitter (TWTR) stock tripled to the $75.00 per share level.

The Happy Days for Twitter were early in 2014 as price began a stellar and long-term downtrend.

From $75.00, price journeyed lower, supporting at the $35.00 level before breaking lower and resuming the downtrend in mid-2015.

Similarly, share prices stalled above $15.00 into 2016 but now may be breaking into a new sell-swing.

Here’s the Daily Chart and breakdown to new lows, keeping the downtrend going:

We define a downtrend as a “series of lower swing lows and lower swing highs” along with a “bearish orientation in the moving average.”

As I frequently highlight, we only trade in the direction of established trends and DO NOT look to fight or fade trends (we’re not reversal traders here).

Twitter is a good example of our “weak stocks tend to get even weaker” concept of swing trading.

A strong surge higher in February off $14.00 led to an aggressive rally higher but the trend continued through March into May.

We’re seeing a breakdown to a new 52-week low this morning, and if sellers keep up the pressure, Twitter (TWTR) shares are likely to continue even lower.

If you’re trading this stock, focus on the $14.00 per share level and the falling 20 day EMA into $14.70.

Be on guard for a possible “Bear Trap” like the example I highlighted for you in “Apple – Trapple.”

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Corey Rosenbloom, CMT

Afraid to Trade.com

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Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

2 Comments

2 Responses to “New Lows for Downtrending Twitter TWTR”

  1. Stocks Are Weak and Downtrending - TradingGods.net Says:

    […] By Corey Rosenbloom […]

  2. Salim Says:

    We got to work through following the trend, I usually stick to this blog suggestions and analysis, it’s always dead on accurate and that’s why I like it ever so much, it really leads me into great profits and that too with high level of consistency, so that’s why I am able to trade with comfort and relaxed mind. I get similar help through OctaFX broker given they too have excellent daily market updates provided by experts, so it works really nicely for me all the time.