Market Overview

Twitter's Breakout Over $50 Turning Into A Fakeout?

Related TWTR
Twitter Investors Don't Care About Trump's New Twitter Handles
Where There's Smoke, There's Not Always Fire: Be Careful With These 10 Rumor Mill Stocks
Twitter Gets Gloomy Coverage As User Growth Stagnates (Investor's Business Daily)

Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Twitter Inc (NYSE: TWTR) shares were trading lower by $1.86 (3 percent) at $49.61 in Wednesday's session. The catalyst for the decline may be a downgrade by Pivotal Research, which downgraded the issue from Buy to Hold and maintained its $51 price target.

At first, the issue shrugged of the downgrade and rallied off the open, but found resistance just above Tuesday's high ($51.79), reaching $51.87 before reversing course.

What may be exacerbating the decline is the trading action as momentum investors piled into the issue as it breached the major resistance level. Traders caught up in Tuesday's buying frenzy are not dumping those positions as the breakout has turned into a fakeout.

So far, the decline has reached $49.31, which is well above Tuesday's low of $48.54. More patient momentum investors may be waiting to see if the issue can reclaim the $50.00 level by the end of today's session before bailing on their long position.

Posted-In: Pre-market outlookTechnicals Intraday Update Movers Trading Ideas


Related Articles (TWTR)

View Comments and Join the Discussion!