Twitter Stock Is Starting To Coil Up In A Pennant: What's Next?

Twitter Stock Is Starting To Coil Up In A Pennant: What's Next?

Twitter Inc. (NYSE: TWTR) shares are trading higher Friday, possibly bouncing back some after losing ground last week. Twitter saw some troubles on the app Friday morning, where some users were unable to get into the app, but most problems seemed to have been resolved.

Twitter was up 1.5% at $63.59 at the time of publication.

Twitter Daily Chart Analysis

  • Shares are at the point of a pennant pattern and look like they could make a large move in either direction anytime now.
  • The stock is still trading within the pennant pattern and may continue to be squeezed within pattern support and resistance until it sees an above-average volume day and pushes above or below one of the levels.
  • The stock is trading below the 50-day moving average (green), but above the 200-day moving average (blue), indicating the stock is likely in a period of consolidation.
  • The 50-day moving average may act as an area of resistance, while the stock could find support near the 200-day moving average.
  • The Relative Strength Index (RSI) has been falling the past couple of weeks, but looks to have bounced back some the past few days. The RSI sits at 43 now, meaning there has been more selling pressure than buying pressure the past few weeks.

(Click on image to enlarge)

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What’s Next For Twitter?

Bullish traders are looking to see the stock trade within the pennant pattern for a time before breaking above pattern resistance. This would let the stock see a strong push higher. Following a breakout, bulls would like to see the stock consolidate for a time before another possible leg up.

Bears would like to see the stock drop below the pattern support and see a further bearish push. If the stock can consolidate below the pattern support it may be ready to see a further drop.

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