The Technical Take On Twitter
Twitter Inc (NYSE: TWTR) stock has been on the rise in the very short-term, with multiple projected scenarios pointing to still-higher prices.
In the bearish scenario, the upside is limited. In the more bullish scenario, the upside can be very nice for the bulls.
Which will it be, though?
What The Bulls See...
• Positive levered free cash flow of $295.87 million annually
• Cash equivalents of $3.65 billion versus $1.53 billion in debt
• A 43.28 percent debt-to-equity ratio
• A current ratio of 9.43
What The Bears See...
• A PE of more than 130, which is tough to swallow despite the company's estimated 2015 revenue and EPS growth estimates of 65.2 percent and 240 percent, respectively
• A market capitalization of $26 billion, which trumps an enterprise value of $24 billion
• A price-to-book ratio of 7.3
• A price-to-sales ratio of 22
The Technical Take
Technicians note that Twitter shares are likely headed higher in the very short-term with a target of $43.95 in the bearish case and $48.56 in the bullish case.
In the bearish case, Twitter is in the midst of the “c” wave of an “abc” upside correction. The “c” wave target comes in at $43.95.
In the bullish case, the current up move is part of wave “iii” to the upside in a five-wave sequence. The first upside target for Twitter in this case would be $48.56. Support for the stock comes in at $38.80 and $35.14.
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