Thinking about buying Twitter (TWTR)? Tweet this! (June 03, 2015)
Today I want to look at Twitter ( NYSE:TWTR ) and here’s why: there was an early, early investor in Twitter ( NYSE:TWTR ) on CNBC today. He was really kind of pushing the company to make some changes, but the thing that got my attention was that he was suggesting that it was a perfect fit for Google ( NASDAQ:GOOGL ) to use with it’s cash. Google ( NASDAQ:GOOGL ) is just kind of trading sideways; you’re not going to get this stock reacting to that type of thing.
But this was just kind of interesting with Twitter ( NYSE:TWTR ) because Twitter ( NYSE:TWTR ) just got crushed after a disastrous earnings quarter. The stock found some support back here at 35.00; here it’s at 36.00. So really you’ve got this kind of no man’s land between 36.00, which I would say is you’re current level of support, and 35.00, which if the stock broke down through 36.00 would probably catch the stock.
So you got, from right here at $37.00, about $2.00 that you’re risking, less than 10 percent. What is that? That’s 5.5 percent, leave a few pennies here and there to account for not having a stop right at the even figure and you’ve still got a trade that’s below 8 percent with respect to risk, which is something that I always like to adhere to. So what I would like to suggest is, this isn’t a trade, this thing isn’t going to pop tomorrow on that news. That guy was interviewed during the middle of the day so that catalyst is over.
What I’m talking about is just general support here. I’d say this is just one of those stocks that I look at and say, “It’s come down enough.” Other than that you just hold this stock. As long as it holds above 35.00 you could even put a stop, a tighter one at like 35.95, something like that and really keep it snug below this first level of support. As long as you are patient and wait for the stock to start trending higher it’s going to start catching some bids. If it moves to, I’d say, 37.50 in to 38.00 you’re going to see folks start coming in to buy this stock because they have totally been avoiding it as it’s been moving lower.
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