Here’s my trade idea on Twitter ($TWTR). (August 19, 2020)
TWTR QQQ TSLA AAPL AMZN TWTR
I want to look at Twitter ( NYSE: TWTR ) today. I haven’t really traded this stock or been in it for a long time but it was the subject of much banter today in our trading forum. And so I took a look at it and thought I would mention it to everybody on the Free Chart list.
The stock is trading sideways right around the 8-day exponential moving average. The Bollinger Bands are actually pretty tight. This is really a stock that is kind of technically in a squeeze here. So this is the way I am looking at the stock. It is just breaking out and frankly, the volume was pretty good. But on a day where the Nasdaq ( NASDAQ: QQQ ) is still okay in a trading range but it was kind of weak. Not a lot of stocks were working well and we got a pretty significant sell-off into the end of the day.
If you want to look at Tesla ( NASDAQ: TSLA ); I don’t know what happened there on Tesla ( NASDAQ: TSLA ). If you want to look at Tesla ( NASDAQ: TSLA ) you will see where the stock was kind of trading lower here. Apple ( NASDAQ: AAPL ), the same deal. Amazon ( NASDAQ: AMZN ), the same deal.
We are getting a lot of selling into the close and then lo and behold here’s Twitter ( NYSE: TWTR ) working pretty well. But of course, even Twitter ( NYSE: TWTR ) sold off into the end of the day but the stock is still working. So this is what I would do: If the stock were to pull back to around 38.00 I think you would have to give that a real hard look to buy. Because over the past several weeks the stock has been trading right around the 8-day moving average. So anywhere around 38.00 is a good place. It is kind of where you need to be. I’m not really sure I would even wait for it to run above the high here of 39.50.
I would say if the stock starts trading above 39.00 you could take a small position, just small. And the reason is because there is that pesky 39.50. And if the stock comes up a bit and then starts moving down you’ve got a larger position on it. It is just kind of more difficult to manage; at least it is for me. If I have a big position on and then a stock starts reversing, not a lot but I kind of thought it was going to go in the other direction, what do I do? Do I go ahead and sell it all or do I just hang on or whatever?
So I always like to start small and then add to it, so if the stock runs up a bit then you go ahead and take it. But it really needs to clear this 39.50 pretty quick because if it doesn’t then I really think the stock still just kind of in congestion. I like the way it traded today though, relative to the rest of the market.
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