Twitter, Inc. (NYSE:TWTR) smashed quarterly estimates
The surging stock price of Twitter (TWTR) is actually coming on the back of some disappointing user metrics. My investment thesis constantly pushed investors to focus on daily active user (DAU) growth, but who knew the stock would finally rally as the company was successful in actually blocking new user signups. The opportunity exists for the social media site to reach new heights by growing both DAUs and the health of the platform.
The stock rallied about 15% on Q3 results as the market was able to shift focus to the 29% revenue growth and away from the ongoing account purge. This statement in the shareholder letter sums up the strange scenario:
We’ve seen a 20% quarter-over-quarter decrease in successful sign-ups since the introduction of these new techniques and believe the majority of this improvement can be attributed to our recent health efforts.
Overall, the bias in prices is: Upwards.
The projected upper bound is: 37.00.
The projected lower bound is: 30.77.
The projected closing price is: 33.89.
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 5 white candles and 5 black candles. During the past 50 bars, there have been 29 white candles and 21 black candles for a net of 8 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 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 83.3167. This is an overbought reading. However, a signal is not generated until the Oscillator crosses below 80 The last signal was a sell 7 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 66.68. 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 buy 30 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 147.This is an overbought reading. However, a signal isn’t generated until the indicator crosses below 100. The last signal was a sell 7 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 24 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed up 1.470 at 33.860. Volume was 61% above average (neutral) and Bollinger Bands were 14% narrower than normal.
Open High Low Close Volume___
31.720 34.540 31.311 33.860 7,789,989
Short Term: Overbought
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 30.36 30.56 33.32
Volatility: 94 66 71
Volume: 6,380,843 4,776,628 5,634,272
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 1.6% above its 200-period moving average and is in an upward 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 bullish on TWTR.N and have had this outlook for the last 6 periods.
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