Conclusion, Investment Implications, Strategy

Twitter, Inc. (TWTR) is amid favorable conditions to resume its July 2020 Strategic advance from major underlying support near $60.39, which is currently being tested.  A sustained rise above this area would target an additional 25% rise to $80.75 per share.  This is an Asbury Value trade idea.

Analysis and Rationale

Twitter, Inc. (TWTR) operates as a platform for public self-expression and conversation in real time United States, Japan, and internationally. The company offers Twitter, a platform that allows users to consume, create, distribute, and discover content. It also provides promoted products and services, such as promoted tweets, promoted accounts, and promoted trends, which enable its advertisers to promote their brands, products, and services. In addition, the company offers MoPub, a mobile-focused advertising exchange that combines ad serving, ad network mediation, and a real-time bidding exchange into one monetization platform; Twitter Audience platform, an advertising offering that enables advertisers to extend advertising campaigns; Developer and Enterprise solutions, a software-as-a-service platform that enables developers to build products on Twitter; and paid enterprise access for its public data streams. Twitter, Inc. was founded in 2006 and is headquartered in San Francisco, California.

The rightmost green highlights in Chart 1 below show that TWTR is currently rebounding from an Aug 19th test of its 200-day moving average, a widely-watched major trend proxy currently situated at $60.39 (upper panel) while also rebounding from monthly (our Tactical time period) oversold extremes (lower panel).  The other green highlights show that similar oversold extremes closely coincided with Tactical bottoms on May 13th and Jan 19th.  These conditions set up a low-risk opportunity to buy an uptrending stock in a potentially low-risk/high reward environment, just above major support.  

Chart 1

If the current major uptrend in TWTR is still valid, this is where it should resume.  A sustained rise above the $60.39 area would indicate this is the case and target an additional 25% rise to $80.75 per share. 

Table 1 below shows that considering the aforementioned upside target and a protective stop placed below the $61.50 area, a long entry price of $64.70 would provide a 1:5.0 risk/reward ratio (risking $1.00 to make $5.00) with an initial risk of 4.9%.

Table 1

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Please consult the table showing our Asbury 6 key market metrics to help determine if this investment is suitable for you.