Twitter shares may have broken past a short-term falling trend line but the longer-term downtrend remains intact. Using the Fib tool on the swing high and low on the 4-hour time frame shows that the 50% level lines up with the descending resistance area.
In addition, a bearish divergence can be seen since stochastic made higher highs while Twitter shares made lower highs. The oscillator has yet to cross below the 80.0 level to indicate a return in selling pressure while RSI is also indicating overbought conditions.
Price is approaching the 38.2% Fibonacci retracement level at $20.63, which coincides with the dynamic resistance at the 100 SMA. This short-term moving average is below the longer-term 200 SMA so the path of least resistance is to the downside.
Meanwhile the 50% level is closer to the trend line and 200 SMA, which suggests that the $25 area might be the line in the sand for any corrections. This also lines up with a former support area that might hold as strong resistance. A break above this level could mark the start of an uptrend for Twitter shares.
Risk appetite has been present in the financial markets for the past week, as speculations of a Fed rate hike in March fizzled. This could mean a longer period of low borrowing costs, which is good for companies and consumers. Also, hopes of an oil production cap among OPEC and non-OPEC nations are helping keep risk flows in play.
As for Twitter itself, analysts speculated that the social media platform could turn itself into a customer support portal, which might serve as a potential revenue driver. The company has struggled with weak earnings and a stagnant consumer base, falling behind its social media peers like Facebook and Instagram.
To contact the reporter of the story: Samuel Rae at firstname.lastname@example.org