Twitter shares are in the middle of a correction from the recent drop since the start of the year, as investors are foreseeing higher revenues after the company’s staff layoffs. Earlier in the month, CEO Jack Dorsey announced that it will be shedding more than 300 positions, amounting to 8% of the social media platform’s manpower.
Twitter shares are currently finding resistance at the 100 SMA, which is below the 200 SMA and indicating that the path of least resistance is to the downside. Using the Fibonacci retracement tool on the decline shows that price is nearing the 38.2% Fibonacci retracement level, which might keep further gains in check.
In addition, the 50% level lines up with a former support at around $35-37/share, which might be the line in the sand for any correction. Stochastic is already moving down, indicating a pickup in selling pressure while RSI is still making its way towards the overbought zone.
Twitter Shares Outlook
The company says it expects to incur $10 million to $20 million in cash expenditures related to severance costs, with total restructuring expenses of $5 million to $15 million, which is still lower than cash expenses.
Investors are foreseeing positive prospects for the company and Twitter shares, as it has been able to hire Omid Kordestani from Alphabet to be its new executive chairman. Kordestani was previously Google’s chief business officer and was its highest-paid executive last year.
The company is set to print its earnings report for Q3 on October 27, setting the stage for volatile moves for Twitter shares. While the overall trend seems to be tilted to the downside, significantly strong figures could trigger a reversal for Twitter shares and a potential rally to the next long-term resistance near the $50/share level.
News that ex-Microsoft CEO Steve Ballmer purchased 4% of the company in stock also provided a bit of support for share prices last week.
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