Twitter – The Bullish Setup First Then Fear

Over the weekend, I had some quality time to study and analyze the Twitter chart again should I decide to trade this stock again. Look at the daily chart, there was so much strong signals at the bottom around the $35-$37 range where I think Elon Musk was accumulating it quietly. However, there was a strong COB soon which might have alerted big time traders to take a look at the stock where major buyers could be accumulating soon. Soon, Twitter was followed by waves of weak selling before finally, the stock slowly creep upwards without much strong buying and suddenly there was a huge news with a gap up where Elon Musk announced his 9.2% stake in Twitter.

The next day, the euphoria continues as more traders piled up their long positions while others were trading the call options, expecting more progression to the upside. If you study the 5 minute chart closely, at the 2nd day of the upmove, there was a serious wave of hidden selling where sellers were unloading on rising prices of the stock where buyers continued to push prices higher. Smart money were indeed selling and taking $$ off the table as prices started to declined in the next few days. See the 5 minute chart and you shall noticed 3 waves of profit taking which was so detrimental to the stock. which one may wonder is Elon still inside the stock?
The fear started to mount and that’s where Twitter prices continue to exude weakness of a very bullish day in the Nasdaq. The whole market was a buying spree while Twitter just lacked of the strength to move forward. Closing wasn’t strong on Wednesday night and then the unthinkable happened the next day on Thursday where Elon Musk offered a hostile take over on Thursday even pre-market where prices gap up again for one to sell, NOT buy! Market opened, Twitter then started to fall and inch by inch, it closed near day low at $45.08. A bullish setup turned fearful as more stakeholders opposed the take over and more negative news on the whole saga which continues to drive the story forward for more price swings. Let’s see what’s going to happen next when it starts trading today. 🙂
Ronnard – Market Psychologist – A Stock Market Opportunist