Twitter, Inc. (NYSE:TWTR) dealing with new privacy laws in Europe
Twitter (NYSE:TWTR) has been falling since it reported earnings in late July. Like some of the other social media companies, Twitter stock is dealing with new privacy laws in Europe and additional scrutiny here in the States.
When TWTR reported earnings back in July, the company beat both its earnings-per-share estimate and the revenue estimate. The problem for TWTR stock was the decline in monthly active users. The decline was attributed to changes by the European Union. The General Data Protection Regulation (GDPR) is a regulation from the E.U. on data protection and privacy and it went in to effect in May.
Twitter has also faced scrutiny from President Trump. He accused the company of “shadow banning” Republicans. Shadow banning is a practice of limiting the visibility of a Twitter user in the platform’s auto-populated search box. Twitter denied the allegations.
Even with the slide in Twitter stock, the fundamentals are still really strong. The company saw earnings grow by 113% in the second quarter and analysts expect the company to grow earnings by 59% for 2018 as a whole.
Sales have grown at a rate of 10% per year over the last three years and they grew by 24% last quarter. Analysts expect third-quarter sales to show an increase of 19% over last year.
The profit margin for TWTR is at 21.4% and its operating margin is at 10.7%. Those numbers could be higher, but at this point, the company is still in the growth phase and those numbers are more acceptable as a result.
If the $26.60 level holds, I look for TWTR stock to rally at least up to the $36 level and that is a pretty solid gain. If the earnings report is as good as the last one and the monthly user data is in-line with expectations or better than expectations, we could see a sharp rally.
Overall, the bias in prices is: Downwards.
Note: this chart shows extraordinary price action to the downside.
The projected upper bound is: 29.11.
The projected lower bound is: 24.27.
The projected closing price is: 26.69.
A big black candle occurred. This is bearish, as prices closed significantly lower than they opened. If the candle appears when prices are “high,” it may be the first sign of a top. If it occurs when prices are confronting an overhead resistance area (e.g., a moving average, trendline, or price resistance level), the long black candle adds credibility to the resistance. Similarly, if the candle appears as prices break below a support area, the long black candle confirms the failure of the support area.
During the past 10 bars, there have been 6 white candles and 4 black candles for a net of 2 white candles. During the past 50 bars, there have been 27 white candles and 23 black candles for a net of 4 white candles.
Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.
One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 38.1427. This is not an overbought or oversold reading. The last signal was a buy 19 period(s) ago.
Relative Strength Index (RSI)
The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 33.14. This is not a topping or bottoming area. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a buy 16 period(s) ago.
Commodity Channel Index (CCI)
The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is -193.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 3 period(s) ago.
The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 10 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed down -2.480 at 26.790. Volume was 18% above average (neutral) and Bollinger Bands were 69% narrower than normal.
Open High Low Close Volume___
29.120 29.120 26.770 26.790 6,811,600
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bearish
Moving Averages: 10-period 50-period 200-period
Close: 28.45 31.31 32.94
Volatility: 63 50 68
Volume: 4,529,215 4,201,013 5,453,628
Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.
TWITTER INC is currently 18.7% below its 200-period moving average and is in an downward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect volume flowing into and out of TWTR.N at a relatively equal pace (neutral). Our trend forecasting oscillators are currently bearish on TWTR.N and have had this outlook for the last 12 periods. The security price has set a new 14-period low while our momentum oscillator has not. This is a bullish divergence.
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