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TWTR: Initial Signs of a Reversal

Monthly time frame:

  • The trend is down (Lower highs/lows) as long as the 10 mma = 26.80 is not reclaimed
  • From the 2013 top TWTR has lost 82% of its value. Is the punishment enough?
  • So far we have a small range body
  • In order to improve the prospect of a bottom TWTR has to breach the trend line from the 2015 lower high and reclaim the 2015 low located at 21

Twitter Monthly Chart
Larger Image

Weekly time frame:

  • From the 2014 peak TWTR has formed a potential Falling Wedge (Bullish pattern)
  • Obviously until the resistance located at 21 is not breached we will not have the confirmation that the Falling Wedge is done

Twitter Weekly Chart
Larger Image

  • If zoom in the potential Falling wedge we can see that TWTR has ended the week with a bottoming tail (Hammer)
  • The Hammer can be an igniting bar
  • The immediate resistance is located at R1=18.77; then we have the 10 wma and the upper converging trend line at 19.80 +/-
  • Above R2= 21 odds should favor a retracement at the target R3= 29.50

Twitter Weekly Zoom Chart
Larger Image

Daily time frame:

  • We have a potential reversal pattern: Thursday's gap down printed an inverted Hammer followed by Friday's gap up and go with a large wide range body which closed Monday's breakdown gap
  • Now if this initial positive move is something more than just a short-lived oversold bounce TWTR has to neutralize February 2 Island reversal by reclaiming the resistance located at 17.27

Twitter Daily Chart
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  • Daily oscillators are poised for higher prices ahead: RSI has a positive divergence and it has breached the trend line resistance from the October 2015 high and the MACD has a new bullish cross

Twitter Daily Momentum Chart
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