Technical Analysis – Twitter stock gains ground from 10-Month low

Anthony Charalambous, XM Investment Research Desk

Twitter stock’s recent improving picture looks to be assisted by the fresh bullish crossover of the 50-day simple moving average (SMA) by the 20-day one, as well as the strengthening momentum in technical indicators.

The short-term oscillators reflect an improving outlook with the MACD slightly over zero, crossing above its red trigger line, while the RSI is rising in the bullish zone and nears its 70 level. However, the bearish overlap of the 200-day SMA by the 100-day one, and the stochastics presently entering the overbought territory may warrant some caution of a possible turn back down or an adoption of a sideways market, given all SMAs’ current trajectory of convergence.

If buyers manage to push north, initial resistance could come from the 34.00 to 34.25 area (June supports-turned-resistances). Overtaking these, the 100-day SMA at 35.76 could impede the stock from stretching to the tougher obstacle at 36.70, where the flat 200-day SMA also lies. Overhead, the 37.22 level, which is the 50.0% Fibonacci retracement of the down leg from 45.81 to 28.60 could halt further advances towards the 61.8% Fibo of 39.27 and swing high of 40.80.

Alternatively, steering lower, the 23.6% Fibo of 32.66 and 20-day SMA at 31.90 underneath could apply some upside pressure ahead of the swing low of 31.14. Diving down, the 50-day SMA at 30.60 may prevent sellers reaching the 29.44 support and ten-month low of 28.60.

Overall, the very short-term looks positive and a break above 34.25 would reinforce this outlook, while a climb above 37.22 could bring into question the decline from 45.81.