Twitter TWTR vs. Facebook FB – How To Avoid Bearish Trends – Technical Lesson Case Study

by Olivier on December 22, 2015

The bearish trend with Twitter – TWTR keeps trapping a lot of traders. This price behavior is the exact opposite of social media winning stock Facebook – FB. Following a few simple technical guidelines will help you avoid painful losses in the future. I believe the main reason why so many are stuck in ‘hope mode’ with Twitter is due to a very common human tendency.

People use the product, I do use Twitter as well, they end up liking it a lot and then they draw conclusions. In this case they equate the company and their positive user experience with the stock.

Drawing such a conclusion can be a very painful and costly experience. Just because a company is perceived to be great doesn’t necessarily mean its stock price action has to be great as well.

Click on Twitter – TWTR chart to enlarge:

TWTR Twitter Tweet Bearish Technicals Case Study Technical Analysis Lesson Down Trend Chart Pattern

Following a few simple rules will make sure you avoid a lot of pain. As you can see in the chart above everything happens for a reason. It should come as no surprise that TWTR closed at an all time low today. Here is how everything started:

  1. Price couldn’t print a higher high.
  2. Long bearish candle cutting through the major moving average 200 like a hot knife through butter.
  3. No retest of the MA 200. Zero technical strength.
  4. Gapping down after hitting the moving average 50 resistance.
  5. Reversal candle without capitulation volume.
  6. Still no capitulation type volume.

Every single observation listed above was a danger sign and a signal to exit a money losing stock trade.

Profit from my 17 years of trading experience. Learn how to correctly interpret technical signals and get exposure to the best leading stocks:
Tischendorf Letter Premium

Previous post:

Next post: