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Twitter Inc (NYSE:TWTR): Buy With Stoploss Below $50

Boston, MA 10/06/2014 (wallstreetpr) –  Twitter Inc (NYSE:TWTR) (Closed: 53.94, Up: 4.03%) has turned out to be a strong candidate for the best performing stocks in the immediate term. The sharp gain on last Friday produced a 7-month high at $54.73. The intraday action was good with a strong opening and trading at the higher levels for most of the session but the late hour profit booking tempered the bullish sentiment a bit. The daily candle formed shows wicks on both sides of the real body, hinting at an underlying conflict though the bulls still dominate comfortably. Perhaps a temporary pause for a session or two will take place before further upmove materializes. The volume pattern is encouraging for the bulls as it has been rising for the last 3-4 sessions after decreasing for a few weeks. The average volume of 26 million was surpassed on Friday with a rise to 31 million, showing actual buying taking place and not mere short covering.

Twitter Inc (NYSE:TWTR) spent nearly the entire month of September in a sideways range of $47.50 to $53.50. The last rally has begun from a higher low at $49.15, compared to the earlier low at $47.56, suggesting a probable Flat correction ending with a C-failure. If this Elliott Wave count is correct, then the implication would be very bullish with much higher targets, even above $60 in the coming days.

The price is already trading above all the standard moving averages and even the sideways consolidation helped Twitter Inc (NYSE:TWTR)  to take a pause, catch up with the averages and bounce with more technical strength. In the last 2-3 days, we can see the 50 day MA to cross above 200 day MA, which is considered a very bullish sign by the analysts and widely tracked by the market.

Expect the stock to continue its uptrend and investment is advised on any dip. The channel containing the entire rally from the May 2014 bottom should provide support near $50 and this can be used as a good stoploss.

Published by Viraj Shah

Viraj Shah has done M.Com (Finance) and currently pursuing CFP. He is a technical analyst who tracks US markets along with other global markets like India very closely. He is very passionate about stocks and believes that money can always be made in market.

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