Short-Term Downtrend on Twitter Shares

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Short-Term Downtrend on Twitter Shares

Short-Term Downtrend on Twitter Shares

Twitter shares are gradually selling off, moving below a descending trend line connecting the latest highs of price action on the 1-hour time frame. Price just tested the falling resistance area and seems to have its sights set on the previous lows around $25/share.

Stochastic is on the move down, confirming that sellers are in control of price action. RSI is also on the move down, which means that bears are getting stronger and might even be ready to push for new lows.

The average directional index has been sliding down though, potentially showing a return to ranging market conditions. However, if the indicator moves above the 40.0 level once more, the downtrend could gain more steam

Twitter Shares Outlook

Not a lot of investors are positive on Twitter shares, as many have actually said that it is in for much longer-term declines. If so, a break below $25/share might be seen, taking price down to the next psychological floor at $20/share.

The stock doesn’t seem to have been able to sustain its gains after shedding more than a hundred employees earlier in the year and even after reinstating Dorsey as its CEO. Twitter pales in comparison to Facebook and Instagram, along with other social media rivals.

Twitter is also facing a slow-growing user base, which suggests that the company has very little incentive to expand its operations or try new features. In addition, monetization thru advertisements could also prove to be a challenge, as this could wind up discouraging its already weak audience.

For others, however, Twitter shares are currently settling in a low-risk buy zone but this is more from a technical standpoint, as the stock is forming a rising channel visible on the longer-term time frames. A small bounce could be possible around the $25/share level but barring an upside breakout from the descending trend line, it is likely that the selloff would persist.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.