Technical Analysis – Twitter flies and hits 52.00
Twitter’s stock skyrocketed on Wednesday after Elon Musk expressed interest again in buying the social media firm for $54.20 a share. From a technical standpoint, the share price has been printing higher lows since July 7 and thus, even if it pulls back after the overstretched rally, the bulls may remain interested and recharge at some point soon.
The RSI and the MACD detect strong upside speed and support the notion for further advances. The former lies above 70, while the latter runs above both its zero and trigger lines. However, the RSI ticked down, which adds to the risk of a potential setback before the next leg north.
The stock may correct lower following the overstretched rally and the test at the 52.00 level, which provided resistance on April 25, but the bulls could still take charge from above 45.00 and lift the price up to the 53.85 barrier, marked by the high of April 5. If they don’t want to abandon the driver’s seat so early, they may extend their advance towards the 58.10 area, marked by the high of October 27.
On the downside, the move signaling that investors have lost their interest in the stock may be a dip back below 42.00. This could pave the way towards the 38.00 territory, near the lows of September 2 and 6, the break of which could see scope for downside extensions towards the 35.00 or 32.30 zones, marked by the lows of May 24 and July 11 respectively.
Summing up, Twitter surged to 52.00 following reports that Elon Musk is interested again in buying the firm. Even if there is a short-term correction due to the overstretched surge, the price structure suggests that further buying may be looming.
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