Technical Analysis – Twitter stock turns bearish below 100-day SMA and uptrend line


Anthony Charalambous, XM Investment Research Desk

Twitter stock price penetrated below the 100-day simple moving average (SMA) and the uptrend line pulled from December 24, indicating that the nine-month up wave, may have come to an end. The push further down is currently restricted by the 38.53 support, which is the 61.8% Fibonacci retracement of the up leg from 34.00 to 45.81.

Whilst the 100- and 200-day SMAs retain their upwards slope, the 20- and 40-day SMAs have turned downwards, aiding further losses, with the 20-day SMA looking to complete a bearish crossover of the 100-day SMA as well. The MACD is marginally below its red trigger line in the bearish region, while the RSI retains a negative view mid-way in the bearish territory. Moreover, the ADX confirms a negative trend.

If the bears manage to clearly close below the restricting 61.8% Fibo of 38.53, the price could sell off to a tougher support barrier at 36.83, where the 200-day SMA and 76.4% Fibo are located. Moving lower, the 35.60 swing low could hinder the decline to test the swing trough at the 34.00 handle.

To the upside, if buying interest picks up driving the price of the stock back above the uptrend line, a challenging resistance area – around 39.92, which is the 50.0% Fibo – could test the bulls as it resides between the nearing bearish cross of the 20-day SMA with the 100-day SMA. Surpassing this area, the swing peak of April 30 could apply further pressure, ahead of the 38.2% Fibo of 41.30 and the nearby 40-day SMA.

In brief, the short-term bias looks bearish and a close below the 200-day SMA would fortify it, while a move above 44.05 could revive the bigger bullish picture.