We’re finally seeing a 200-day moving average on Twitter (TWTR). And it’s defining support….tentative yes,..but support nonetheless. (October 25, 2014)
I want to look at Twitter ( NYSE:TWTR ). You know some of these Internet stocks, the most notable of which is Facebook ( NASDAQ:FB ), have been really doing well. Facebook ( NASDAQ:FB ) is actually the only one that I can think of that’s been doing really, really well. Twitter ( NYSE:TWTR ) is kind of like Facebook ( NASDAQ:FB ) only with not as many characters.
But I’m looking at this as a pretty good opportunity, because when you look at the 200-day moving, this little guy here, and it just started here because, guess what? There are exactly 200 trading days it took in order to start this moving average. So you’ve got this 200-day moving average, that’s held once and then twice here. At the same time the 50-day moving average has held here.
By the way, there’s nothing magical about the 50-day moving average. Let’s do this and see like maybe the 48-day will be the magical thing instead, that’s even better. Let’s try like the 45-day moving average, look how good that is. I’m making a point here, let’s try the 60-day moving average, not so great there, but it really does seem to help here and look at it, it’s still holding it here. What’s my point? Well my point Horshak is, that we use 50-day moving averages; we use 200-day moving averages, because that’s what everybody looks at.
Why look at something different when you can see the same thing that everybody else is seeing? You’re edge is that you’ve got some discipline and you know what to do. Whereas people who don’t look at charts are simply not people you want to trade with. A legendary trader named Bruce Kovner is quoted in “Market Wizards” as saying, and you fundamentalists listen up because he’s talking to you. “Fundamentalists who say they are not going to pay attention to the charts are like a doctor who says he is not going to take a patient’s temperature.” And no more than present has it been important to take a patient’s temperature when they’re sick.
The bottom line is, you want to use charts and you want to look at the same charts as everybody else is, because then stuff starts making sense to you. Which gets me back to this point, the 200-day moving average, brand new moving average, is holding. The 50-day moving average, this is kind of a new breakout, a new reversal, so it hasn’t really been tested much. But the 50-day moving average, so far, is holding as well. So you’ve got this general kind of area of support here, like right around 50ish, with the 200-day moving average down about 46ish, I guess. So really, as long as the stock stays above this level, it’s a logical place for a stop. You put it a little bit lower than that, but as long as the stock stays above this level this is a stock that I think you can own.
Between the two of them, if I had to choose between Facebook ( NASDAQ:FB ) and Twitter ( NYSE:TWTR ), and I do, I’ll own Facebook ( NASDAQ:FB ). Some of you guys are probably already “Facebookians” and I’m saying you can be “Twitarians” here. So you can go ahead and do this. Just make sure you’ve got the 200-day moving average as your reference point. If you’re new to charts then you need to start thinking like a doctor with a sick patient or a patient that he’s examining, you want to take their temperature, you want to look at charts.
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