What Should Investors do with Twitter, Inc. (NYSE:TWTR) Stock?
Unmatched earnings momentum, corporate tax cuts and fiscal stimulus underpin our positive view. We like momentum. We prefer quality over value amid steady global growth but rising uncertainty around the outlook. Financials and technology are our favored sectors.
Nearly one fifth of the S&P 500 market cap and 11% of the STOXX 600 market cap are scheduled to report second-quarter earnings this week. Analysts see U.S. firms posting exceptionally strong earnings growth of 20% from the prior year period.
These expectations reflect tax reform and are already baked into prices, setting a high bar for firms to get rewarded for their results. We will be focusing on corporate guidance, especially any signs of how firms are weathering escalating trade tensions and political uncertainty. Higher commodity prices may be a headwind for some companies’ margins, but analysts expect them to contribute to particularly strong sales and earnings for global energy firms. The tech sector is expected to lead in top- and bottom-line growth, continuing a recent trend.
Twitter (NYSE:TWTR) achieved its goal of turning a profit in the fourth quarter last year, and it followed it up with another profitable quarter to start off 2018. The company’s success has led to a huge run-up in its stock price over the first half of 2018. Shares are up more than 85% so far this year as of mid-July.
Twitter certainly deserves some love. Not only is it turning a profit, it’s showing strong (albeit opaque) daily user growth, its video strategy is attracting viewers and advertisers, and it seems to have spending (including stock-based compensation) under control.
But given the run-up in the company’s stock price, investors should take a closer look at its valuation before buying shares.
Overall, the bias in prices is: Upwards.
Note: this chart shows extraordinary price action to the upside.
The projected upper bound is: 47.58.
The projected lower bound is: 41.48.
The projected closing price is: 44.53.
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 32 white candles and 18 black candles for a net of 14 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 59.7962. This is not an overbought or oversold reading. The last signal was a sell 18 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 54.43. 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 14 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 -28. This is not a topping or bottoming area. The last signal was a buy 2 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 14 period(s) ago.
Rex Takasugi – TD Profile
TWITTER INC closed down -0.230 at 44.260. Volume was 66% below average (consolidating) and Bollinger Bands were 58% narrower than normal.
Open High Low Close Volume___
44.160 44.730 43.915 44.260 2,031,835
Short Term: Neutral
Intermediate Term: Bearish
Long Term: Bullish
Moving Averages: 10-period 50-period 200-period
Close: 44.63 39.58 29.04
Volatility: 53 46 63
Volume: 5,035,422 6,306,782 5,333,482
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 52.4% 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 0 periods.