TWTR Twitter – Social Media Stock Starting Bullish Upside Move

by Olivier on March 24, 2015

Twitter is gaining some serious traction as their business model is starting to make more sense with each passing day. Heck, even I am on Twitter now 😉 Kidding aside, the name of the game is to wait for the charts to confirm one’s bullish assumptions. The long white candle TWTR – Twitter printed today is the confirmation technical traders had been waiting for. There was no serious selling into the close which is a sign traders and institutions were building positions today in order to hold for the medium to long term.

As of yet FB – Facebook is the undisputed social media king but TWTR is starting to get its act together. To make a long story short, from a valuation perspective TWTR has probably more potential than FB and should start to outperform its peer stock. Time will tell.

Today’s break out to the upside with TWTR looks extremely constructive due to the significant volume increase and the break out of its recent sideways trading channel drawn in blue. If we see follow through within the next few days this will drastically increase the odds for TWTR to have started a run to the upside. I drew the potential start of an ABC chart pattern into the chart. According to technical analysis a conservative price target around 60$ seems more than reasonable.

Click on TWTR chart to enlarge:

What makes the current situation very interesting is that institutional money can easily pile into such a liquid big cap name like TWTR. Once they pile into a new name the run tends to last for quite some time as institutional money needs a lot of time to build their entire position. They also tend to support the stock all the way up until their initial reason for entering is invalidated.

Assets are worth owning when their price is going up. This seems obvious but it is amazing how many investors I meet who own stocks because they were going up in the past, not because they are going up now. There are a lot of investors living in the past. – Tyler Bollhorn


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