As a trader my first objective is to not be wrong. Therefore having the ability to completely reverse direction in positioning and frame of mind is of vital importance. With that being said previously I had been bearish on Twitter, but today’s technical action forces me to change that posture. Clearly we got a breakaway gap today on Twitter on huge volume. Now granted the stock was well off it’s highs for the gap, but in general this type of bullish move will not be reversed suddenly. Twitter is either going to chop sideways from here or move further higher.
Now if the overall stock market enters a bear market I think a stock like Twitter will get destroyed. It’s got a crazy valuation and it’s not even the most important social network. Many of the accounts on Twitter are fake, and I don’t see how this social networking advertising model can just keep growing indefinitely as more companies enter the fray. But until we get a bear market Twitter is probably going sideways to higher.
