Is Twitter A Buy? Look At The Stock’s Daily And Weekly Charts To Find Out

Shares of Twitter (TWTR) have been on the rise since trading as low as $31.30 on February 24, when many stocks set tradeable bottoms. The stock has been above its 50-day simple moving average since Match 17 and its weekly chart has been positive since the week of March 25, 2022.

On Monday, April 4, billionaire Elon Musk disclosed that he bought a 9.2% stake in the social media networking company. He is now the largest shareholder as the stock gapped above its 200-week simple moving average or “reversion to the mean.”

Studying Twitter’s fundamentals makes no sense, so I will focus only on its daily and weekly charts.

The Daily Chart for Twitter

Twitter set its 52-week high of $80.75 on February 25, 2021, then came a bear market decline. From this high to the May 13, 2021 low of $49.12, the stock lost 39%. TWTR was a buy at the 200-day simple moving average at $52.15 on May 11, 2021.

From $52.15, shares of Twitter rallied to as high as $73.34 on July 23, 2021, gaining 40%. The stock then traded lower once again. This decline led to the formation of a death cross confirmed on October 27, 2021. This occurs when the 50-day simple moving average falls below the 200-day simple moving average as a sell signal at $60.05.

This bear market warning continued until the stock bottomed at $31.30 on February 24, 2022. This bear market was a decline of 47%.

Twitter is now in a bull market runup from $31.30, which will find resistance at its semiannual risky level at $53.88. This rally if sustained will total 72%. The 50-day and 200-day simple moving averages are now at $36.15 and $52.08, respectively. The horizontal lines are the semiannual risky levels at $53.88 and $73.63.

The Weekly Chart for Twitter

The weekly chart for Twitter has been positive since the week ending March 25, 2022. The stock is above its five-week modified moving average at $39.86. It’s also above its 200-week simple moving average or reversion to the mean at $42.26. The 12x3x3 weekly slow stochastic reading is rising at 50.68. Remember that stochastic readings scale between 00.00 and 100.00 with readings above 80.00 overbought and readings below 20.00 oversold. At the low, this reading was below 15, which is a reading that indicates that the stock was “too cheap to ignore.”

Trading Strategy: Buy Twitter on weakness to its 20-week simple moving average at $42.25. Reduce holdings on strength to its semiannual pivot at $53.88.