Like to trade after hours? Here are some thoughts on Twitter (TWTR). (July 28, 2015)
Here’s a 5-minute chart of Twitter ( NYSE:TWTR ) during market hours, closed here. Now, I want to look. I want to look at the after hours action after the company reported earnings. They beat consensus on earnings and sales, which, since nobody was expecting much of anything was actually kind of easy to do, and the stock gaps up, or it just starts running.
What I want to do is look at post market levels to see if we can just kind of make some trading decisions here. The first move is typically always wrong. If you can get in there early enough then you’re still going to make money. This is within the second 5-minutes of trading. What do we have here? You see this big massive swing up, some lemming bought at $41.00, that’s probable the same chucklehead who sold a 34.50. So this is where the trading range is. Typically after hours, once you get that kind of big move, that thing is going to hold.
So as I’m doing this video, you can tell when this is, it’s at 5:24, that’s what time I’m doing this. Anytime the stock comes down the 34.00’s here this is where you’re buying. When it comes up into the 38.00’s, something like that, that’s where you’re selling. This is about the only after market video I can really give you. It’s all subject to what happens in the conference call and that type thing. But you can see this was a really big volume spike.
Somebody puked a lot of shares up, 1.5 million shares in a 5-minute period after hours. It was probably something that was said by somebody, I don’t know, maybe somebody on “Fast Money” said that they didn’t like it. Or maybe it was just somebody who said I got to get out of here, maybe the conference call started, whatever. But as I see this stock now you want to look at about 34.50 as your support level on this stock. You can buy anywhere down here and hold it.
And you say, “How can you do that? Because what if the stock goes lower?” Well all right, 34.50; now lets go back to daily chart, 34.50, doesn’t show after hours trading here, this is just regular stuff. Okay, well if 34.50 is actually support for this stock, it has been for a couple of months. So this is one of those times where you could actually trade after hours, if you want, because you know where support is on a daily chart, you know where support is on the intraday chart and they all kind of line up so that you’re actually not taking that much risk.
Here’s one kind of risk that people don’t think about, the company beats on earnings consensus and on revenue. What about the analysts tomorrow morning? Because they’re all so great, it takes them a while to preen in front of the mirror and get their suits tidied up just right so they can go in and upgrade a stock to an outperform, or whatever, tomorrow morning. Because Twitter ( NYSE:TWTR ) beat on sales and earnings; maybe they guide upward and the stock opens up tomorrow at 37.72. You had an opportunity to buy in the after hours knowing that the stock was after it had made it’s big reversal after hours the stock was above this level here. So you can see it’s falling back to it.
Now, here’s the other thing though, here’s your support right here. What if you buy here and then the stock continues to fall? Well guess what? Too bad, so sad, you got stopped out. That’s why it’s called trading, it’s not called winning. So what we’re just simply looking at here are after hours levels that pretty much correspond with regular trading hours levels. You can actually be making a purchase after market in anticipation of some activity tomorrow morning that is not happening right now.
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