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Twitter Has Unfinished Business to the Downside
Worse-than-expected earnings or otherwise, the stock is projected to fall at least under 8%.
Marc Eckelberry    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

On the morning of April 29 before Twitter's (NYSE:TWTR) earnings, I posted a cautionary Buzz & Banter on the stock given the lack of capitulation volume and excessive optimistic sentiment, while the chart was still deteriorating. This left no room for error for the report, and unfortunately, we did indeed get a breakdown after it was released.

From April 29:

On March 31 on the Buzz & Banter [subscription required], I posted a chart of Twitter, highlighting the importance of the 47.28 level (23.6% Fibonacci retrace) and how losing it could trigger a full retrace to 38.80. We pretty much accomplished that with a low of 39.68 one month later. A sizable bounce followed, which stalled at 47.28 -- and, of course, in true 2014 style, proceeded to destroy everyone who jumped on board late. Yesterday, the stock retested the lows, and the double bottom has gotten everyone excited today. Unfortunately, we have yet to see a capitulation low in terms of volume, so I suspect we're not done with the downside, whether after earnings or later. The stock is currently up 4% for the day, and volume put to call has dropped to 0.50 (at the time of this post), an astoundingly optimistic level. This has raised the bar even more for a stock that's trading in bear territory, much like many Nasdaq highfliers. A close above 47.28 would go a long way toward restoring confidence. Until then, tread with caution. This is a sector everyone wants to get out of on rallies this year.

Is it over? I don't think so.

The volume since then looks more like a churn bar, and now that we broke 38.80 on a closing basis, we're most likely headed for a minimum projection to either 30.32 or 29.03. This doesn't mean we won't bounce here and there, but keep the bigger picture in mind, which is biased to the downside. Sellers will be waiting for those bounces.


Click to enlarge

Twitter: @AheadoftheNews

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
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No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Marc Eckelberry
    Twitter Has Unfinished Business to the Downside
    Worse-than-expected earnings or otherwise, the stock is projected to fall at least under 8%.
    Marc Eckelberry    

    This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

    On the morning of April 29 before Twitter's (NYSE:TWTR) earnings, I posted a cautionary Buzz & Banter on the stock given the lack of capitulation volume and excessive optimistic sentiment, while the chart was still deteriorating. This left no room for error for the report, and unfortunately, we did indeed get a breakdown after it was released.

    From April 29:

    On March 31 on the Buzz & Banter [subscription required], I posted a chart of Twitter, highlighting the importance of the 47.28 level (23.6% Fibonacci retrace) and how losing it could trigger a full retrace to 38.80. We pretty much accomplished that with a low of 39.68 one month later. A sizable bounce followed, which stalled at 47.28 -- and, of course, in true 2014 style, proceeded to destroy everyone who jumped on board late. Yesterday, the stock retested the lows, and the double bottom has gotten everyone excited today. Unfortunately, we have yet to see a capitulation low in terms of volume, so I suspect we're not done with the downside, whether after earnings or later. The stock is currently up 4% for the day, and volume put to call has dropped to 0.50 (at the time of this post), an astoundingly optimistic level. This has raised the bar even more for a stock that's trading in bear territory, much like many Nasdaq highfliers. A close above 47.28 would go a long way toward restoring confidence. Until then, tread with caution. This is a sector everyone wants to get out of on rallies this year.

    Is it over? I don't think so.

    The volume since then looks more like a churn bar, and now that we broke 38.80 on a closing basis, we're most likely headed for a minimum projection to either 30.32 or 29.03. This doesn't mean we won't bounce here and there, but keep the bigger picture in mind, which is biased to the downside. Sellers will be waiting for those bounces.


    Click to enlarge

    Twitter: @AheadoftheNews

    Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
    < Previous
    • 1
    Next >
    No positions in stocks mentioned.
    The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

    Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
    More From Marc Eckelberry
      Twitter Has Unfinished Business to the Downside
      Worse-than-expected earnings or otherwise, the stock is projected to fall at least under 8%.
      Marc Eckelberry    

      This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

      On the morning of April 29 before Twitter's (NYSE:TWTR) earnings, I posted a cautionary Buzz & Banter on the stock given the lack of capitulation volume and excessive optimistic sentiment, while the chart was still deteriorating. This left no room for error for the report, and unfortunately, we did indeed get a breakdown after it was released.

      From April 29:

      On March 31 on the Buzz & Banter [subscription required], I posted a chart of Twitter, highlighting the importance of the 47.28 level (23.6% Fibonacci retrace) and how losing it could trigger a full retrace to 38.80. We pretty much accomplished that with a low of 39.68 one month later. A sizable bounce followed, which stalled at 47.28 -- and, of course, in true 2014 style, proceeded to destroy everyone who jumped on board late. Yesterday, the stock retested the lows, and the double bottom has gotten everyone excited today. Unfortunately, we have yet to see a capitulation low in terms of volume, so I suspect we're not done with the downside, whether after earnings or later. The stock is currently up 4% for the day, and volume put to call has dropped to 0.50 (at the time of this post), an astoundingly optimistic level. This has raised the bar even more for a stock that's trading in bear territory, much like many Nasdaq highfliers. A close above 47.28 would go a long way toward restoring confidence. Until then, tread with caution. This is a sector everyone wants to get out of on rallies this year.

      Is it over? I don't think so.

      The volume since then looks more like a churn bar, and now that we broke 38.80 on a closing basis, we're most likely headed for a minimum projection to either 30.32 or 29.03. This doesn't mean we won't bounce here and there, but keep the bigger picture in mind, which is biased to the downside. Sellers will be waiting for those bounces.


      Click to enlarge

      Twitter: @AheadoftheNews

      Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
      < Previous
      • 1
      Next >
      No positions in stocks mentioned.
      The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

      Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
      More From Marc Eckelberry
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