Twitter Inc stock is once again staring at a big sell-off. At least that’s what the technical charts indicate. Shares tumbled 4 percent on Friday to close marginally above the key support of $14.
And the way bears steadily gained control over the past one week, traders shouldn’t be surprised if the micro blogging site plots a fresh 52-week low in the coming few sessions.
$14 is Make or Break for Twitter Inc Stock
A look at the daily price chart of Twitter reveals the importance market is attaching to the area around $14. Since the start of the year, the stock has reversed multiple times from this zone. In fact, it spent the entire month of May hovering around that level, before mounting a smart bounce back to $15.
But the rally was short lived after bears regained ground and hammered shares back to $14. As such, any break below such a strong support would surely open up much further downside in the stock.
Traders with a short to medium term view can initiate short positions in Twitter, with a stop loss just above $14.50. The immediate target would be a drop to the current 52-week low of around $13.70. If bulls fail to hold on to that level, further short positions can be added.
Twitter Inc Troubles Keep Mounting
Shares of Twitter had an incredibly rough session on Friday after two big stories rocked the company. The first surrounded news that hackers, using malware infected browsers, stole 32 million user passwords. While the network was not directly breached, sentiment was badly hit.
The second bad news came in the form of a survey run by Comcast subsidiary Strata, to gauge the trend of marketing execs and their ad dollars. Twitter fared poorly, with only 56% advertisers saying they would be willing to use the site. Not surprisingly, Facebook topped the list, with 96% saying they would be willing to use the social networking giant.
Given the current turmoil, SunTrust Robinson thinks a sale seems somewhat “inevitable.” “We want to underscore that we do not think the company is up for sale in the near term. However, we believe that if current trends persist, TWTR would be a top candidate in 2017,” analysts there wrote to clients.
MoffettNathanson agrees that there’s “no compelling reason” to own Twitter, other than the prospect of it being acquired.
Shares of Twitter Inc closed last week at $14.02.