Twitter TWTR Gaps into Resistance – Trade Planning

Feb 1, 2016: 12:04 PM CST

Popular stock Twitter bounced into resistance this morning on possible acquisition rumors.

Price jumped up 8% into a key resistance target – we can plan the next swing trade from this key level.

Let’s do it!

First, check our prior update “Downtrending Twitter Can’t Catch a Break” from January 19th.

From then price did trade lower to retest the prior low ahead of today’s “Twitter caught a break from a rumor” event.

Rumors can send stock prices flying in either direction which provides both opportunity and risk.

Rumor aside, let’s focus on the chart and trade plan based on current levels.

It’s a fact that Twitter (TWTR) shares remain in an ongoing strong downtrend.

However, even in downtrends, price swings higher in counter-trend retracements or rallies against the trend.

Right now we’re seeing one of those events.

Share prices are reacting up away from the $16.00 per share pivot level toward the falling 20 day EMA at $18.50.

We’ll note $18.50 as our neutral target zone and will expect a breakout swing higher – targeting the falling 50 day EMA at $21.50 – if price surges above the current resistance spot.

Otherwise, Twitter remains a ‘downtrending short sale’ if price immediately trades down away from $18.50 – and if the rumors are quashed.

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Corey Rosenbloom, CMT
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  1. Twitter Stock Bounces into Resistance Says:

    […] By Corey Rosenbloom […]