Twitter shares have consolidated inside a descending triangle pattern, forming lower highs on the 1-hour time frame and finding support at $25/share. However, this support level has just been breached, indicating that Twitter shares are in for more declines.
Stochastic and RSI are both on the move down, confirming that sellers are in control of price action. Once both oscillators turn form the oversold region, a bit of profit-taking could take place and allow for a pullback to the broken triangle support.
Meanwhile, the average directional index appears to be headed higher, potentially showing a return to trending market conditions. The 100 SMA is below the 200 SMA, which means that the path of least resistance is to the downside and that the selloff is likely to persist.
Twitter Shares Outlook
Risk appetite has kept Twitter shares afloat last week but it appears that the stock’s weak fundamentals are getting the upper hand. Several analysts have already noted the company’s stagnant user base and issues with upper management as among the major reasons for more losses.
With that, Twitter shares could head south towards the $22-23/share level, chalking up a decline that’s about the same size as the triangle formation. If profit-taking occurs, the $25/share level is likely to keep further gains in check.
In current events, the company has filed a trademark for the term “subtweet” which refers to the act of quoting a person’s tweet without using their handle. However, it is still not clear what this has to do with the social media platform’s brand or future plans. In addition, sponsored tweets and other forms of monetization still don’t seem to have gained much traction.
To contact the reporter of the story: Samuel Rae at firstname.lastname@example.org