Popular stock Twitter bounced into resistance this morning on possible acquisition rumors.
Price jumped up 8% into a key resistance target – we can plan the next swing trade from this key level.
Let’s do it!
First, check our prior update “Downtrending Twitter Can’t Catch a Break” from January 19th.
From then price did trade lower to retest the prior low ahead of today’s “Twitter caught a break from a rumor” event.
Rumors can send stock prices flying in either direction which provides both opportunity and risk.
Rumor aside, let’s focus on the chart and trade plan based on current levels.
It’s a fact that Twitter (NYSE:TWTR) shares remain in an ongoing strong downtrend.
However, even in downtrends, price swings higher in counter-trend retracements or rallies against the trend.
Right now we’re seeing one of those events.
Share prices are reacting up away from the $16.00 per share pivot level toward the falling 20 day EMA at $18.50.
We’ll note $18.50 as our neutral target zone and will expect a breakout swing higher – targeting the falling 50 day EMA at $21.50 – if price surges above the current resistance spot.
Otherwise, Twitter remains a ‘downtrending short sale’ if price immediately trades down away from $18.50 – and if the rumors are quashed.