Twitter, Inc. (NYSE:TWTR) showed that its efforts to improve the user experience were starting to pay off

Twitter, Inc. (NYSE:TWTR) showed that its efforts to improve the user experience were starting to pay off

Twitter, Inc. (NYSE:TWTR) showed that its efforts to improve the user experience were starting to pay off

Twitter shares surged Tuesday after the company showed that its efforts to improve the user experience were starting to pay off.

The key metric for Twitter TWTR, +2.96% is user growth, an area where the social-media company has shown recent struggles. That wasn’t the case in the first quarter, as Twitter added 8 million new monetizable daily active users, the highest number of quarterly additions since at least the start of 2017.

“Twitter continues to execute significantly better, and those 8 million DAU adds feel like a potential inflection point,” wrote RBC Capital Markets analyst Mark Mahahey, who rates the stock at sector perform but upped his target price to $38 from $34. “There’s still the basic point that rising tides lift (almost) all boats, and internet advertising remains a massive wave.”

Shares rose 15.6% in Tuesday’s session, their best day since Oct. 26, 2017, when the stock gained 18.5%.

Twitter earned at least one analyst upgrade after the results came out, as Cowen & Co.’s John Blackledge abandoned his bearish stance and raised his rating to market perform from outperform.

“We thought tough [comparisons] in 2019 coupled with the lack of a scaled direct response ad offering would yield significant ad revenue growth deceleration as we worked through 2019,” he wrote. “But based on the [first-quarter] growth and the [second-quarter guidance], the ad biz is pacing better than expected.” Blackledge raised his target price to $36 from $24.

For the second quarter, Twitter expects revenue of $770 million to $830 million. Analysts had been calling for $818 million.

Twitter shares are up 38% so far this year, as of Tuesday’s close, compared with a 17% gain in that time for the S&P 500 SPX, -0.28%.

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

The projected upper bound is: 41.61.

The projected lower bound is: 35.84.

The projected closing price is: 38.73.

Candlesticks

A big white candle occurred. This is generally considered bullish, as prices closed significantly higher than they opened. If the candle appears when prices are “low,” it may be the first sign of a bottom. If it occurs when prices are rebounding off of a support area (e.g., a moving average, trendline, or retracement level), the long white candle adds credibility to the support. Similarly, if the candle appears during a breakout above a resistance area, the long white candle adds credibility to the breakout.
During the past 10 bars, there have been 4 white candles and 6 black candles for a net of 2 black candles. During the past 50 bars, there have been 26 white candles and 24 black candles for a net of 2 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with TWITTER INC), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

Momentum Indicators

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.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 45.8144. This is not an overbought or oversold reading. The last signal was a buy 5 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 56.68. 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 sell 11 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 8. This is not a topping or bottoming area. The last signal was a buy 5 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a sell 10 period(s) ago.

Rex Takasugi – TD Profile

TWITTER INC closed up 1.110 at 38.580. Volume was 17% above average (neutral) and Bollinger Bands were 18% narrower than normal.

Open High Low Close Volume___
37.410 39.320 37.250 38.580 3,836,359

Technical Outlook
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish

Moving Averages: 10-period 50-period 200-period
Close: 37.77 35.71 32.60
Volatility: 42 50 59
Volume: 2,614,762 3,226,435 3,970,036

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.

Summary

TWITTER INC is currently 18.4% above its 200-period moving average and is in an downward trend. Volatility is extremely low when compared to the average volatility over the last 10 periods. There is a good possibility that there will be an increase in volatility along with sharp price fluctuations in the near future. 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 3 periods.

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