NEW YORK (TheStreet) -- Far from just keeping up with news and gossip, Twitter  (TWTR - Get Report) posts can be used to predict price movements in the stock market. 

Thursday's market presented three great examples. First, Analog Devices Inc. (ADI - Get Report) opened low Thursday as a result of an analyst downgrade the day before. But the stock saw some ups and downs in its price and sentiment during the day.

Some 50 minutes later, around noon, the sentiment changed again. People were getting more bullish on the stock and tweeted their doubts about it. At 12:01 p.m., when the price was $60.26, the sentiment of the stock had changed significantly. Sixteen minutes later, it was trading at $59.73.

Meanwhile, Strategic Hotels & Resorts  (BEE) had an adventurous day. There was a circuit breaker on the stock when the news broke out that it was a potential takeover target.

By 3:37 p.m., the sentiment on the stock had changed positively by a considerable level -- four standard deviations in four minutes. The stock was trading at $12.53 at this point. Five minutes later, at 3:42 p.m., the price shot up by more than 8%, to $13.62.

Twitter sentiment can predict stock changes even after the market close, as in the case of Amazon (AMZN - Get Report).

The market consensus was that the company would not beat expectations, but the social media consensus was different. SMA data showed a sharp increase in sentiment metrics around 2:49 pm. By 2:51 pm, the sentiment on Amazon was two standard deviations higher than its typical level. The stock was trading at $480.45 at this point.

At market close, it traded at $482.18, higher than the price at the time when sentiment on Amazon became positive. What is interesting was how the stock traded after-hours once the company reported earnings.

Amazon's stock shot up more than 17% -- to $568 -- from its price at 2:51 p.m. after the company reported a surprise quarterly profit. The hidden sentiment value in Twitter data predicted what market speculators failed to predict.

 

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.