TWTR Stock: On the Cusp of a Trend Reversal
Things are really starting to look up for Twitter Inc (NYSE:TWTR) stock, as there are indications on the company’s stock chart that are suggesting that TWTR stock in on the verge of a breakout. This breakout would go as far as to suggest that the stock has finally found its footing and a bottom has been forged. If my analysis is correct, this would mark the point where Twitter stock transitions from a bearish trend into a bullish one, implying that higher stock prices are on the horizon.
A bullish view on Twitter may sound like a far-fetched statement to make, considering how painful the past performance of this investment has been, but the method of investment analysis I base my investment views on suggests that a movement towards a bullish view is now in progress.
If you have not frequented my publications in the past, it is worthwhile to note that my views on a potential investment are generated using technical analysis. This method of investment analysis is predicated on analyzing indications on a company’s stock chart to determine whether the stock price is set to stage an advance or a decline.
In my previous report, titled “Twitter Stock Needs to Do THIS to Confirm It Has Bottomed,” that was published on May 23, 2017, I outlined that $20.00 is the price point I am watching, and in order to suggest that a bottom is in place, that price point needs to be cleared. This price point is currently being tested once again. The following Twitter stock chart illustrates the importance of this $20.00 price point.
Chart courtesy of StockCharts.com
I have highlighted this TWTR stock chart to illustrate that a technical price pattern is developing that suggests a bottom is being forged. This technical price pattern is a double bottom, and it is characterized by two troughs that are separated by a peak in between. A trend reversal is confirmed when the stock price closes above the peak that separates these two troughs.
These two troughs found support at $14.00. I am omitting the value at $25.00 as the peak because this price point was created when there was chatter that a buyer would step in and buy the company. Instead, I am using the $20.00 price point that has consistently turned away all attempts to stage an advance since the stock price fell below this level in 2016. I firmly believe that once the Twitter stock price closes above this level, it will confirm that a double bottom is in place and that higher prices are likely to follow.
In order to break above the $20.00 level, bullish momentum is needed, and the moving average convergence/divergence (MACD) indicator located in lower panel is suggesting that this is the case.
To clarify, MACD is a momentum indicator that is used to distinguish between bullish and bearish momentum. A bullish MACD cross was generated in April 2017, and it is suggesting that bullish momentum is creating a path of least resistance that is geared towards higher stock prices. This is the bullish momentum that is required to break above $20.00, which would suggest that a bottom has formed, reinforcing the notion that a bull market is in development.
The following stock chart is taking things one step further and suggesting that the bear market in Twitter stock has already concluded.
Chart courtesy of StockCharts.com
This TWTR stock chart uses a monthly scale in order to illustrate that a large bearish trend has prevented the share from making an advance.
The bearish trend, which is characterized by lower highs, is the quintessential characteristic of a bear market and it is best defined using a simple downtrend line. This downtrend line is created by connecting the peaks of the price chart, and it illustrates that TWTR stock has been unable to breach this level of resistance until now.
This downtrend line, which acts as a dividing line between bullish and bearish investments, has finally been breached, suggesting that TWTR stock is now set for a bullish advance. This feat is highlighted as a breakout on the stock chart above and it carries a number of bullish implications.
Breaking above the $20.00 price point would in actuality be the second indication suggesting that a bullish advance is under way, which would act as a reinforcing indication that supports the notion of higher Twitter stock prices.
Bottom Line on Twitter Stock
Twitter stock is on the verge of confirming that a bullish trend reversal is in the making, and a close above the $20.00 price point would confirm this notion. This would mark the point in time when TWTR stock transitions from a bearish trend into a bullish one, providing a tremendous investment opportunity.