Don't Believe M&A Rumors: Twitter Is A 'Disaster'

JC Parets is a weekly guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick.

Eagle Bay Capital Founder JC Parets told Benzinga that Twitter Inc TWTR is a "disaster" and that his favored strategy is to fade any rallies that extend into the $32 to $34 per share region.

Parets also cautioned traders who are in Twitter looking for someone like Google Inc GOOG to make an offer for the company. Investing on that basis is "nonsense," he said. Parets pointed to the fact that the company's shares are down around 30 percent since those rumblings started to grow in the market.

"Client demand is what moves markets," Parets said.

Related Link: Twitter CEO Decision Is 'Imminent,' Board Shake Up Is Next: Bob Peck

Twitter is currently trading below its former support at $34 and, with a downward sloping 200-day moving average and a backlog of "overhead supply," Parets expects the stock to see further weakness. However, he said that he would not short the stock at these levels either.

His favored strategy would be to sell into strength as he thinks that traders who are long the stock will use those opportunities to get out of the market. Twitter is down more than 20 percent this year and nearly 50 percent off its highs around $53 per share.