Twitter Breaks Out And How Stage Analysis Keeps You In Long Term Trades
Justin Smyth | Jun 04, 2018 01:16AM ET
Here’s an updated chart of Twitter Inc (NYSE:TWTR) which closed at the high of the week last week and made a new 52-week high.
Just to recap what has happened with this stock:
- It broke out of a Stage 1 base back in October of 2017.
- Then it really surged higher in late January 2018 and drew huge institutional-type volume after an earnings report.
- Then in late March and early April we had a mini-panic in social media stocks but notice how Twitter stayed above its 30-week moving average during that downturn. This is important because Stage 2 uptrend.
- Now the stock is breaking out again to new 52-week highs and notice how it is accelerating its outperformance of the S&P 500.
Now the power of Stage Analysis is in the simplicity of the framework as far as staying in long term trades. What we’re looking for is the strongest stocks in the strongest sectors when the major indexes are in a bull market. Often times the strongest stocks will trend above the 30-week moving average for months to years and produce huge winning trades. One such example is Square (NYSE:SQ) which broke out of a Stage 1 base back in August 2016, and after a retest of the 30-week moving average in October 2017 has been in a Stage 2 bull market ever since. You can check out this stock at the Stage Analysis Screener and see that has been in Stage 2 for 89 weeks now!
Of course there is no way to predict whether Twitter will perform as well as Square, but all that is really important is whether it continues to rise above a rising 30-week moving average. If it keeps doing that for a year or longer it could be a big winner just like Square.
Disclosure: I am long shares of TWTR.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.