Twitter (TWTR) — time to buy? (June 16, 2014)
I’m looking at Twitter ( NYSE:TWTR ) here; I think I’ve looked at this recently, I’m pretty sure I was talking about this in the Free Chart, I know we’ve been looking at it at Stock Market Mentor. This was in a volatility squeeze and the real question I had with this was, it had been trending down and the resistance line that I have drawn here was really coincident with the 50-day moving average, there’s no such thing as a 200-day moving average on a stock that hasn’t been trading 200 days so that’s not relevant. But my question was, is this going to breakout above this level, and it has and I look at this as a bullish indication.
I think you can buy Twitter ( NYSE:TWTR ) but I’ll have this caveat, volume was really big here but over the last couple of days volume has declined so that could be a potential problem. The way you really trade this thing is use, I would say, the prior days intraday low, not like today’s, but use the prior day’s, that’s Fridays intraday low as a reference for your stops, because you want to say, “I like the stock here at 37.68, but if it starts falling back below this last low here that also takes it below the 50-day moving average, so maybe I don’t want to be long this stock.”
Now, alternatively there’s this, you can look at this stock and say, “I know this stock isn’t going to zero, it looks like support is at $30.00, 30.00, $31.00 so that’s at almost 6 percent below where the stock is trading right now, but maybe I’m bullish on Twitter ( NYSE:TWTR ) for the long-term so maybe I’ll just take a small position right now, and yes I’ll say it, not even have a stop on it. Or to put it another way, take a small position and have it be so small that I would be willing to hold the stock if it pulls all the way back to 30.00 and maybe even consider buying more at that time.”
So the bottom line is you’ve got a decision to make: do you want Twitter ( NYSE:TWTR ), fine, I think you do. How are you going to buy it? I’ve just outlined those scenarios for you. I think Twitter’s ( NYSE:TWTR ) right to buy right now. It would have been nice to have gotten it down here, some people did but you probably weren’t one of them, neither was I, so now we’ve got an opportunity to get a stock that’s starting to come out of a base here.
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