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Buy or Sell Twitter as Dorsey Steps Down as CEO?

Twitter shares spike higher, then collapse lower on Monday on news that CEO Jack Dorsey is stepping down. Here's the trade now.

Twitter  (TWTR) - Get Twitter, Inc. Report stock is all over the map on Monday morning as it announces a change at the top.

Current CEO Jack Dorsey will step down as CEO, as the company names CTO Parag Agrawal its new CEO.

Keep in mind that Dorsey is also the CEO of Square  (SQ) - Get Square, Inc. Class A Report.

The news initially sent Twitter stock higher in premarket trading and shares opened the session higher by more than 10%.

The stock moved higher before being temporarily halted on the day. Now Twitter stock is flat on the day. 

It’s been a tough ride for Twitter, with shares down in seven straight weeks. In fact, it’s been a tough ride for most social media stocks, as Snap  (SNAP) - Get Snap, Inc. Class A Report and Pinterest  (PINS) - Get Pinterest, Inc. Class A Report have been hit hard too.

Can a CEO change shake things up for Twitter and end its losing streak?

Trading Twitter Stock

Weekly chart of Twitter stock.

Weekly chart of Twitter stock.

TheStreet Recommends

Above is a weekly chart of Twitter. The stock’s opening gap-up is being sold into, which comes as little surprise.

On the plus side, the stock filled today’s gap, both on the daily and the weekly chart. Now trying to bounce off the lows, bulls are looking to regain some of that morning momentum.

Last week, the stock bounced hard off the $46 to $47 area, which were major resistance areas in 2018 and 2019.

From here, I’d love to see Twitter regain the May low at $49.12. That’s when the first bear market came to an end in growth stocks (although this group has again come under pressure).

However, bulls want a little more than that. More specifically, they want Twitter stock above $50 and the 21-month moving average.

If the stock can give that to them, bulls could be long Twitter against the November low.

Should the stock take out the November low, the 200-week moving average could very well be in play.

On the upside, a move back over $50 puts this week’s early high in play at $52.27, followed by the declining 10-week moving average. Above that and it’s possible we see $55, then $60.