Twitter’s Must-Know Chart Levels Once It Reports Earnings

After a strong rally for Twitter over the last few weeks, let's look at the charts as the company gears up for earnings.
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Twitter  (TWTR) - Get Report faced some fallout last month when it suspended former President Donald Trump’s account.

Facebook  (FB) - Get Report was right in the mix too and both stocks saw a shock of volatility as a result. After a brief dip, both stocks have reclaimed the “political loss” levels from early January.

More specifically, Twitter hasn’t seemed too bothered by the development.

Shares are working on the seventh straight daily rally with Twitter set to report earnings on Tuesday after the markets close.

Twitter has gained 35.5% from the lows on Jan. 19, and has been hitting multi-year highs in the process.

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Trading Twitter

Daily chart of Twitter stock.

Daily chart of Twitter stock.

If traders were to nitpick one thing about the current rally, it would likely be that it’s occurring on low volume.

At the end of the day though, price is price. Meaning, it doesn’t matter if Twitter traded 1 million shares a day or 50 million shares - it still went from $50 to $60 in eight trading days. That being said, it would have been nice if it could have done so with a day or two of above-average volume.

With the rally, shares rallied hard off the $44.50 level, clearing the prior high near $56 with relative ease. If it can continue from here, see if it can get to the shorter-term 161.8% extension, at $63.35.

Above that could put a longer-term price target of $71 in play, about where the 261.8% extension from the larger range comes into play.

What do bulls want to see?

As much as a rocket boost to the upside would be, it wouldn't be unhealthy to see a slight dip on earnings.

Ideally, a decline back to the $55 to $56 area would occur, allowing the 10-day moving average to act as support.

If Twitter has proven one thing, it’s that we can’t bet on the stock’s performance to be all that consistent, as this name has been all over the map over the years. If it continues higher, we have $63 and $71 as possible upside targets.

On the downside, watch $55 to $56, then $51 to $52. The latter range includes the 50-day moving average and a key extension level.

Below that area puts the 100-day moving average in play, followed by $45.