This popular social media stock rose rapidly to all time high of $74.74 in December after gone public at $26 in November last year. Ever since then it has been trending down. On February 6, TWTR dropped 24% to $50 on more than 3 times average volume after earning report. This caused extreme technical damage to the stock. Since then, short cover, bargain hunting has pushed stock back up to $60. However, it happens that $60 is where the 50 day moving average lies and is where its upward movement stopped. It turned sharply down yesterday and a technical sell signal issued. Stock is up slightly today due to buy action in sympathy to Facebook's high price taking over of Whatsapp. But it is only up 18 cents today and price action is weak in the face of a 109 point up move in the Dow Jone Industrial Average.
I think this is a perfect time to short TWTR at this price level. Reasons are its chart looks very bearish, high forward PE of 266 and employee stock lock up period expired and may usher in fresh selling pressure. It will stay in a downtrend unless it recovers above $60. Down side price targets are $50 then $40.
Disclaimer: The above write up is for your information only. You are responsible for your own risk when taking position in these stocks. Author of this blog may already own position in the mentioned stocks.
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