TWOU Stock: A Bull Market in Development
The first quarter has passed, and in all honesty, it is a quarter I’d like to forget. It has been a very difficult market to navigate, characterized by its wild market swings. Markets that open higher have a tendency to close lower, and markets that open lower have a tendency to close higher. When the indices are plagued with elevated levels of volatility, these swings have a tendency to prey on people’s emotions.
In light of this market action, I continue to maintain a bullish posturing. It has not been an easy task. Luckily, I don’t take my cues from my emotions. Instead, I am watching key levels of price support, and as long as the markets continue to trade above them, I will maintain my bullish views.
Speaking of price support, I am focusing in on 2U Inc (NASDAQ:TWOU) stock because it has just finished testing a very important level of price support.
This level of price support is highlighted on the following TWOU stock chart.
Chart courtesy of StockCharts.com
This 2U stock chart highlights a bullish trend that began in January 2017.
This bullish trend consists of price action characterized by a series of higher highs and higher lows, which is the quintessential characteristic that defines all bullish trends.
The series of higher highs and higher lows has been responsible for moving TWOU stock from a low of $29.23 to where it currently resides at $89.06, representing a 204.69% return.
The uptrend line highlighted in blue on the 2U stock chart was created by connecting the series of higher lows that characterized this bullish trend. The uptrend line is a significant level of price support, and every time it has been tested, it has attracted buyers to step in and support the share price.
The sheer number of times it has been tested is a testament to its significance, and refuting this notion is becoming more difficult every time 2U stock bounces off of it.
As long as TWOU stock is trading above this uptrend line, I can only assume that a bull market is in development and that higher stock prices will prevail over time. If, on the other hand, TWOU stock falls below this trend line, I will assume that the bullish trend that began in January 2017 has run its course and that lower prices are likely to prevail.
The recent swoon in the markets has caused TWUO stock to correct, and it has found price support on this uptrend line, just as it has every other time since it began.
The bounce off support has resulted in higher stock prices, and 2U stock is now approaching a level of price resistance.
This level of price resistance is highlighted on the following 2U stock chart.
Chart courtesy of StockCharts.com
This 2U stock chart illustrates a significant level of price resistance, which resides at $90.00, and a significant level of price support, which resides at $78.00.
These levels of price support and price resistance have created a trading range that has contained the TWOU stock price since early March after resistance was first established.
The next sustained move in TWOU stock will be predicated on its ability to either break above support or fall below resistance.
I have already established that price support outlined by the uptrend has successfully been tested, so that leaves price resistance as the next logical price objective.
The moving average convergence/divergence (MACD) indicator has swung into bullish alignment, supporting the notion that resistance may soon fall.
MACD is a simple yet influential indicator that distinguishes whether bullish or bearish momentum is influencing the price action in a stock. Bullish momentum implies that a stock is likely to appreciate, while bearish momentum implies that a stock is likely to depreciate. The key takeaway of this indicator is that a sustained move in either direction cannot occur unless the applicable level of momentum is supporting it.
The bullish MACD signal has increased the odds that resistance will be broken on this attempt, implying that TWOU stock is likely to continue making higher highs as its bullish trend continues its development.
2U stock has just tested a very significant level of price support that has defined its bullish trend, and as long as TWOU stock continues to trade above it, higher prices will prevail and its bull market will remain intact.