Social? More Like Anti-Social Media, Twitter Inc (NYSE:TWTR)
High flying sectors have been under pressure this past week as people are fleeing from risky names like Twitter Inc (NYSE: TWTR). This social media name has been hit hard in the past few trading sessions along with its rivals such as, Facebook Inc (NASDAQ: FB), Pandora Media Inc (NYSE: P) and Yelp Inc (NYSE: YELP). These high beta names have really had quite the volatile year this year after such astronomical gains in 2013.
So why the sudden sell off in Twitter Inc (NYSE: TWTR) and the group? Well if you listen to the financial media, they will tell you the same things over and over again. When times are bad, this stock was overvalued, it has no earnings, its P/E is too high, people aren't tweeting as much...etc. When things are good they basically say the opposite and paint a rosy picture. I don't know about you, but all that talk gives me a headache bigger than the one felt by the bulls of this sector lately.
I look at charts and charts alone. They eliminate all that white noise and garbage, which is spewed out on a daily basis by the majority of the talking heads on TV. If you looked at the chart of Twitter Inc (NYSE: TWTR) you could have seen a break of the up sloping trend line, that had been in place since the lows were set in late May. There has definitely been some technical damage done to this name. However, that does not mean there are not opportunities to catch a trade on the long side for a bounce. On the chart below, I have included some levels of support which could provide a quick long trade. So while the media will keep giving dizzying reasons for an equities movement, I will look to the charts to tell me when anti-social, becomes social media again.
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The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.