Don't Sell Twitter Yet

Embattled social media company Twitter now looks poised to rise.
By Richard Saintvilus ,

Twitter (TWTR) - Get Report  is on a winning streak. The embattled social media company now looks poised to finally reach $20 per share -- an important psychological level, for a 15% premiums in the second-half of the year.

The stock rebounded some 26% since falling to its 52-week low of $13.73 on May 24. The shares have returned more than 10% since I recommended it as a buy on June 17. And the recent increase is 25% above the point when I recommended buying the stock near its all-time low on May 4.

Things are finally starting to "go right" for this company. Twitter management is forging some critical partnerships that have generated momentum.

As for technical metrics, it's time to bet for more gains. Twitter might still appear fundamentally challenged. But the chart below, courtesy of TradingView, shows the stock no longer appears broken. 

Twitter shares closed Friday at $17.28, up 2.19%. The stock is now well above its critical 20-day ($15.86 -- blue line), 50-day ($15.22 -- pink line) and more importantly, its 100-day ($16.18 -- yellow line) moving averages. The 100-day is further confirmation that the stock has consolidated. These moves suggest that buyers are back and the bulk of the selling might be over.

The once-heralded Wall Street darling turned punching bag has been one of the best-performing stocks over the past month. Twitter stock rose almost 14%, besting the S&P 500I:GSPC  index's 0.31% decline during that span. Even with Twitter's strong run, the shares are still down more than 55% from their 52-week high of $38.82.

If you're on the sidelines, be prepared to pay more the stock. Now's an ideal time to play for a rise to around $20 per share. With Twitter stock now at $17.28, a move towards $20 would translate to gains of more than 15%.

The bet is that all of the bad news about the company is likely out. Anyone who has wanted to sell their shares may have already done so. It would be a mistake to take profits now.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.

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