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Summary
Is Twitter (TWTR) About to Trigger a Buy Signal?
Twitter price action has been basing above the 50d since late October when it gapped above a 30.00 (+/-) resistance zone. Lately, the stock is attempting a move above 36.00 (+/-) which would trigger a buy or add to our portfolio.
Twitter (TWTR) Buy
Volume has been above average for the past eight (8) trading days, while the stock closed at its upper Bollinger Bands on Tuesday. Look for the bands to expand further, as both top and bottom are moving away from each other. This condition signals a fast move as volatility expands.
The last two times Bollinger Bands contracted, the resulting expansion lasted 5 days before contracting again. The stock then flagged in both cases. We’ll look for the same to sell covered calls again. The stock needs to break above 36.00 first.
Twitter (TWTR) Earnings
Annual sales and earnings in the left panel show the company doubled returns from 2017 to 2018. Last earnings report beat by (+110%), adding to our interest. The RS line is climbing (91) and the stock garners a (95) Composite rating from Investors Business Daily.
ATHM (+0.61%) pre-market is number one in this group; this is one of the reasons it has been on the weekly watch list. Autohome is alittle extended from its 20d as it breaks higher this week.
Make a note of IV Rank, which is currently hovering around (38.56%). We would like a move above 50% before considering selling premium again.
Monitor Twitter (TWTR) for a break out above 36.10 (+/-) on above-average volume as the stock trades higher in pre-market action. We are considering adding shares to our existing positions on the next break out trigger above 36.00 (+/-). Stay tuned.
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Happy Trading,
Vinny
UPDATE: DAY TWO
Investors Business Daily Leaderboard added 3 stocks last night to watch lists. TTD was added to the Leaders List and Sector Leaders List. All three are in various stages of building the right side of their patterns. Look for follow-through in these stocks. FTNT was dropped.
Twitter (TWTR) Cup Pattern – Follow-through Day
Twitter(+0.30) is higher in early trading. Bollinger Bands were very tight on short-time frames going into the close, so that volatility should help propel the stock higher.
Leaderboard – TWTR FTNT TTD SPLK
Check out the daily charts. All three of these stocks should move higher into Friday. FTNT was dropped.
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