Twitter, Inc. (NYSE:TWTR) Under Pressure
After years of underperformance, Twitter Inc (NYSE: TWTR) stock finally delivered some major gains for investors in the first half of 2018. Unfortunately, Twitter’s rally may have already run out of steam.
On Wednesday, Macquarie Research analyst Benjamin Schachter downgraded TWTR stock from “buy” to “neutral.” Schachter says Twitter has competitive positioning in the social media market, and its management has made significant progress in establishing Twitter’s role, monetizing its user base and producing more consistent results. However, he says Twitter still faces lingering usage challenges, and the stock is no longer a compelling value after more than a 85 percent gain in 2018.
Twitter has always been pricey relative to its (until recently nonexistent) earnings, but the recent share recovery has made its valuation inexplicable.
Under generally accepted accounting principles, Twitter’s enterprise value — or the market value of its stock minus cash plus debt— is 2,074 times its net income over the 12 months ended March 31, according to calculations derived from Bloomberg data. Allow me to provide a sophisticated analysis: That is bonkers. On the same measure, perennial crazily valued Amazon is trading at 221 times its trailing net income.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 46.79.
The projected lower bound is: 40.55.
The projected closing price is: 43.67.
A white body occurred (because prices closed higher than they opened).
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 31 white candles and 19 black candles for a net of 12 white candles.
A spinning top occurred (a spinning top is a candle with a small real body). Spinning tops identify a session in which there is little price action (as defined by the difference between the open and the close). During a rally or near new highs, a spinning top can be a sign that prices are losing momentum and the bulls may be in trouble.
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 45.6626. This is not an overbought or oversold reading. The last signal was a sell 21 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 50.72. 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 17 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 -136.This is an oversold reading. However, a signal isn’t generated until the indicator crosses above -100. The last signal was a buy 5 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 sell 17 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed up 0.100 at 43.440. Volume was 60% below average (consolidating) and Bollinger Bands were 59% narrower than normal.
Open High Low Close Volume___
43.310 43.860 43.110 43.440 2,388,402
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 44.39 40.33 29.44
Volatility: 49 47 63
Volume: 5,162,087 6,313,726 5,357,901
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 47.5% above its 200-period moving average and is in an downward trend. Volatility is low as compared to the average volatility over the last 10 periods. 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.