Shares of customer engagement platform Twilio (TWLO) have been hurt with several hard blows starting with weak fourth-quarter guidance in last night's earnings release. In addition, investors are contending with a number of fundamental downgrades and price target cuts on Friday. Let's check out the charts to see if there is any light at the end of the tunnel.
In this daily bar chart of TWLO, below, we can see that prices have crumbled in the past 12 months and still gapped sharply lower this Friday. Prices are still weak and trade is at or near the low of the day. The slopes of the moving averages are negative. The trading volume is surging as traders vote with their feet. The daily On-Balance-Volume (OBV) line has made a new low for the move down and confirms the price weakness as sellers remain more aggressive. The 12-day price momentum study showed that downside momentum was slowing, but that technical clue was no help.
In this weekly Japanese candlestick chart of TWLO, below, we can see the rise and the fall of this stock. Prices have given back all the gains and traders who focus on "support" need to look back to 2017 to find any clues about where buyers may re-enter. The slope of the 40-week line is negative. The weekly OBV line showed some improvement after a long decline but renewed weakness in the OBV line likely with today's selloff. The MACD oscillator is bearish.
In this daily Point and Figure chart of TWLO, below, we can see the most recent decline with the gap filled in. Here the software projects the $5 area as a potential price objective.
In this weekly close only Point and Figure chart of TWLO, below, we can see that prices reached and exceeded a target of $52.
Bottom line strategy: I don't know if the $5 Point and Figure target for TWLO is too bearish but the $30 zone is probably the most likely price target. Avoid the long side of TWLO.
