Technical Analysis – Twitter stock touches upper boundary of trading range; eyes on gap

Anthony Charalambous, XM Investment Research Desk

Twitter stock lunged up out of a trading range trying to fill the gap from July 2018. The move had price hit a nine-and-a-half month high of 40.90 to only fall back into a two-and-a half month sideways market, where the price is currently shaking hands with the upper boundary.

Price has printed a red candle, besides a bullish cross up of the 40-day simple moving average (SMA) by the 20-day SMA. The MACD, although above its trigger, is flat, whereas the RSI is in the positive area slightly pointing to neutral areas. The ADX shows a missing trend.

If the price retreats, it would hit the 23.6% Fibonacci of the upleg from 26.22 to 40.90, of 37.31, before finding the 20- and 40-day SMAs. However, in case of a rebound on the ascending trendline, the market could push the stock higher again towards the upper boundary of 39.13 to test the high of 40.90. If fractured and the gap is filled, a 161.8% Fibo of the down move from 40.90 to 34.00, of 44.93 could unfold.

On the other side, if the price falls beneath the uptrend line around 36.35 before touching the 38.2% Fibo of the upward wave near 35.21. More losses could be faced around the 34.00 handle and the 50.0% Fibo of the upleg near 33.47.

Summarizing, the short-term view seems neutral to bullish, whereas traders need to be cautious of a break below 34.00 and the near 200-SMA to turn the bias bearish.