Twitter shares could be due for more losses, as technical indicators suggest that a downtrend is taking place. The short-term 50 simple moving average crossed below the 200 simple moving average on the daily time frame while the stock found resistance at the 50 SMA.
MACD is moving up, although it seems to be having difficulty gaining traction and may head south once more. RSI is also heading higher, indicating that there’s a chance of another SMA test.
Twitter Shares Forecast
If the selloff resumes, Twitter shares could test the recent lows around $36/share or perhaps create new ones closer to $30/share. A break above the 200 SMA, however, could mean that the downtrend is set to be reversed. In that case, Twitter shares could make a long-term climb to the previous highs around $56/share.
The path of least resistance is to the downside though, as risk aversion remains in the financial markets and continues to weigh down US equities. The possibility of Fed tightening later this year could drag profits lower, as it would mean more expensive credit and investment.
News that Twitter bought Indian company ZipDial sparked a bit of buying pressure for the company stock earlier in the week, as investors were keen to find out how this could impact operations and usher in more revenues. The deal is designed to aid the company as it moves into a new era of fast growth in India and other significant emerging markets, according to a report by Financial Times.
Whether this results to better prospects for Twitter stock remains to be seen as details of the deal haven’t been fully disclosed yet. “Over the next several years, billions of people will come online for the first time in countries like Brazil, India and Indonesia. But the cost of data may prevent them from experiencing the true power of the Internet. Twitter, in partnership with ZipDial, can make great content more accessible to everyone,” Twitter’s VP of product, Christian Oestlien said in a statement.
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