Twitter, Inc. (TWTR) was reviewed back in late October when we said, "In this Point and Figure chart of TWTR the gaps disappear and we can see the last rally high at $20.84. An upside price target near $27 is projected. This is the most constructive chart picture I have seen for Twitter for months. Prices may finally be ready for a recovery phase..." With TWTR trading above $25 this morning a fresh look at the charts and indicators seems in order. 4,260 followers and counting...
In this daily bar chart of TWTR, below, we can see that the chart and indicators have strengthened. Notice how the pullbacks in early November and late November were short in duration. It has been my experience that corrections that that are short are a sign that buyers are aggressive and are pushing money into a stock in a short period of time.
Prices are above the rising moving averages and the On-Balance-Volume (OBV) line has climbed since late October to make a new high for the move up. The strong OBV line helps to confirm the price advance. The Moving Average Convergence Divergence (MACD) oscillator turned up in recent days for a fresh outright go long signal.
This weekly bar chart of TWTR, below, shows a great looking base pattern just as it is about to break out. Prices are above the rising 40-week moving average line. Prices are back up to the 2016 high around $25. This two-year base has a height of around $10 ($15 to $25) and that amount would be added to the breakout point for a longer-term price target of $35. The weekly OBV line has been rising for more than four months telling us that buyers have been more aggressive. The weekly MACD oscillator gave an outright go long signal at the beginning of October.
In this Point and Figure chart of TWTR, below, we can see the last breakout at $23.25 and an upside price target of $30.72.
Bottom line: TWTR has sprinted higher and it could see a high-level correction as some point but because of the strong trend I would probably buy some TWTR here and if there was a shallow correction I would probably use that to buy more. Risk a close below $21 and target the $35 area.