After spending the morning lower, the communications platform's shares are at this writing up about 3%, as traders grapple with a bevy of news.
The shares have bounced nicely from the March lows, rallying almost 80% ahead of earnings in early May.
However, the earnings didn’t give investors an excuse to take profits. Instead, it gave the green light to stomp on the gas pedal.
The better-than-expected results and robust guidance sent the shares higher by 39% in a single day, while Twilio stock boasted a one-week gain of 66%. The move was incredible - and it hasn’t let up.
While the shares have slowed a bit on the upside as momentum has waned, the stock has kept all of its gains as it consolidates in a sideways manner.
Twilio has proved that it can generate strong revenue growth with or without coronavirus headwinds in play.
Although the shares may waver due to the short-term gyrations in the broader market, this stock continues to tiptoe higher, leaving traders to speculate that new highs may be on the way.
Let’s look more closely at the charts.
Trading Twilio Stock
I love the way this stock is trading. I am willing to change my bullish sentiment should the technicals warrant it, but so far all the action tilts toward the bulls’ favor.
Twilio stock continues to put in a series of higher lows, highlighted by uptrend support (blue line). With Monday’s rally, Twilio stock reclaimed the 20-day moving average, which then held as support on Tuesday.
The action increasingly has bulls salivating on a breakout, which is happening as shares clear resistance near $203 and rotate over last week’s high of $205. With the move, investors have seen a temporarily push through its prior all-time highs near $210.
Over $197 and Twilio stock will maintain over the two-times range extension from the March low to February high.
If the shares gain truly serious momentum, the 261.8% extension is in play near $238, although a move of that magnitude will take time to play out.
Assuming Twilio can hold over the $203 to $205 area on Tuesday, look for the bulls to remain in control.
On the downside, a break of the 20-day moving average puts uptrend support in play. Below uptrend support and bulls will lose short-term momentum, while putting the $175 to $180 area in play.
For now, keep an eye on $203 to $205 on the downside. Below puts the 20-day moving average back in play. On the upside, see if Twilio can close at new all-time highs. If it can, it unlocks more potential upside.