Facebook (FB) - Get Facebook, Inc. Class A Report and Pinterest (PINS) - Get Pinterest, Inc. Class A Report were each about 6% on the day, being led higher by Snap (SNAP) - Get Snap, Inc. Class A Report, which is up about 25% and hitting new highs after strong earnings.
Further, CEO Jack Dorsey said Bitcoin would be a “big part” of the company’s future.
Twitter has actually been one of the better performers of this group lately, although bulls were surely looking for a better reaction to earnings.
Do the charts suggest potential upside? Perhaps, but Twitter has a clear hurdle it needs to get past.
Trading Twitter Stock
In May, Twitter rallied hard off the test of its 50-week moving average. The stock was getting crushed amid a bear market in growth stocks, but this support measure held perfectly.
While weak-handed longs were dumping their positions and short-sellers were adding to theirs, this support level gave the stock the energy to squeeze higher.
Shares ripped from sub-$50 to more than $70 in less than two months. However, $72.07 was the high from this month, before the stock again dipped lower.
Twitter was able to take this level out earlier in the day, but it’s struggling to stay above it. Further, the second-quarter high at $73.22 is giving the stock trouble.
This area is the hurdle that I was referencing earlier. If Twitter can clear Friday’s high - and thus, the $72 to $73.25 area - then perhaps we can see the stock go on a run like Facebook and Snap.
Over $75 and the highs near $80 have to be on investors’ radar.
Should the stock fail to clear this hurdle, we could see a dip down to the 10-day and 21-day moving averages. If those levels fail as support, a retest of $65 is possible.