Technical Analysis – Twitter stock pauses above uptrend line; loads for next direction


Anthony Charalambous, XM Investment Research Desk

Twitter stock is currently consolidating around 32.68 – which is the 23.6% Fibonacci retracement of the down leg from 45.81 to 28.60 – capped by the 20-day simple moving average (SMA) and supported by the 50-day SMA and uptrend line drawn from 14 November 2019. Backing this view are the momentum oscillators, the flat 200-day SMA and Ichimoku lines.

The MACD has slipped below its red trigger line but both are still hovering slightly above zero, while the RSI is lingering around its neutral mark. Noteworthy are the SMAs, which reflect conflicting signals as they converge around the 33.30 area, suggesting that the stock may endure a sideways move for a while longer.

If the ascent from the low of 28.60 keeps up and buyers move over the 20-day SMA at 33.25, the drive upwards would need to conquer a fortified resistance area from 34.00 to 34.50. This area involves the inside swing lows from June 2019, the upper band of the Ichimoku cloud and the encapsulated 100-day SMA. Overhead, the 38.2% Fibo of 35.19 may interrupt the rally from challenging the 36.70 resistance, where the 200-day SMA also lies. Climbing above, the 50.0% Fibo of 37.21 could deter the bulls from filling the gap and reaching the 61.8% Fibo of 39.24.

If sellers steer below the 23.6% Fibo of 32.68, the uptrend line and the 50-day SMA at 31.91 could prevent the bears testing the fresh 31.14 low. Dropping down, the 29.44 support from 3 December 2019 may impede further losses towards the ten-month low of 28.60 and the 27.88 obstacle underneath.

Summarizing, the very short-term bias appears neutral-to-bullish above the uptrend line and 31.14 level, and only a break above 34.50 would boost the positive picture.