Twitter Setting Up a Buying Opportunity for Patient Investors

NEW YORK ( TheStreet) -- Twitter has been steadily drifting lower for two weeks now. The huge breakdown back on April 28, which sent shares 18% lower following a disappointing first-quarter report, is still weighing on the stock.

More downside appears to be ahead, and with it, a very low-risk buying opportunity for patient bulls. 

As TWTR begins to pierce the $36 area, it will enter a major support zone. This key area includes the stock's summer 2014 lows as well as its December multi-week bottom. In January of this year, the $35.50 level marked the month's low as shares built a four-week base. As February began, TWTR exploded to the upside after breaking out of its January consolidation. In addition, as the $36-to-$34.50 area is tested, the stock will return to a deeply oversold MACD reading.

Also significant is the dramatic easing of selling pressure of late. While TWTR nears major support, it appears to have become completely sold out.

 

This article is commentary by an independent contributor. At the time of publication, the author was long TWTR.

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