This Market Vet Said Owning Shares Of Twitter 'Isn't Necessarily A Terrible Trade'
J.C. Parets is the founder of Eagle Bay Capital. He is a 10-year market veteran and Market Technician who manages money incorporating Technical Analysis and Behavioral Finance into his practice.
The expert discussed the limited risk profile associated with owning shares of Twitter Inc (NYSE: TWTR).
"I told you over a month ago that it's dead money," Parets said, referring to comments he made in late April.
Parets did however note that he is beginning to see some bullish signs, especially following Wednesday's pop in shares but he isn't seeing enough evidence of a mean reversion back to the $44 level. Naturally, he noted that if he did see these signs, he would be long himself.
Parets said that the risk profile on Twitter is "so low defined," and the trade does make some sense. He pointed out that shares are hovering about $1 above the lows it set a few weeks ago (near the $36.00 level) and owning shares at these levels isn't "necessarily a terrible trade."
He added that the upside potential in shares could be as high as $44. By setting the $36 level as a stop, investors have a seven point potential upside and a less than one point downside.
"If you are in it, I don't hate it ... but I'm not in it," he concluded.
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