Is It Too Late to Join the Twilio Rally?

Our latest analysis and trading strategy for TWLO stock.

Jim Cramer told viewers during Thursday's Mad Money program that investors are latching onto any reason to buy stocks. Many feel that April was the bottom for most industries, while others are betting on crude oil's steady climb from its lows.

Others, as Cramer discussed in his Real Money column "The Hope Is Real", are taking cues from stocks like Twilio Inc. (TWLO) , which shocked Wall Street with terrific earnings that sent shares surging Thursday and again Friday.  

Let's check out the charts and indicators of this cloud communications platform. 

In this daily Japanese candlestick chart of TWLO, below, we can see that prices were in a downtrend from July to the middle of March. The stock rallied in late March and then corrected in early April before the start of the current upside run. Prices moved above the bottoming 200-day moving average line early this month and the slope of the 50-day moving average line turned positive.

The trading volume surged sharply and prices gapped higher Thursday. The daily On-Balance-Volume (OBV) line jumped to a new high for the move up and the Moving Average Convergence Divergence (MACD) oscillator continued its positive trend. 

 

In the weekly Japanese candlestick chart of TWLO, below, we can see that prices have blasted to a new high for the move up and smashed the 2019 highs. Prices are above the declining 40-week moving average line and the weekly OBV line is close to making a new high for the move up. The OBV line has been bullish the past three years.

 

The MACD oscillator has surged above the zero line for an outright buy signal.  

 

 

In this daily Point and Figure chart of TWLO, below, we can see that prices met and exceeded their $141 price target. 

 

In this weekly Point and Figure chart of TWLO, below, we can see a potential longer-term price target of $382. 

 

 

Bottom-line strategy: The price of TWLO is extended so it makes it hard to recommend at current levels. Traders should wait for a period of sideways price action before probing the long side.

 

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