Twitter Inc (TWTR)

Trade what you see.  Not what you think or feel or hope or . . .

• What I see on the chart below is a newly issued stock that is currently trading below the first trading day's range.  I also see that the current price is below the down trend line (DT) and just above the all time low line.  You should be able to see a triangle on the chart.  Horizontal bottom, red hypotenuse, imaginary left side.  This kind of triangle makes me feel like the stock price is being pushed down further and further and will eventually go below the horizontal base.  But that may or may not be the case...

• Let's agree that the price of TWTR has to either break above the right vertex of the triangle or below it.  Agreed?  Ok then.  Whatever it does may be a sign of things to come.  If it closes below the horizontal base, then I would look for lower prices for the moment.  If it closes above the hypotenuse, then I would look for higher prices in the near future.  Could both of these expectations be wrong?  Yes.  The price could go sideways.

• Notice that two days ago the stock closed below the horizontal base.  I took that as a bearish sign.  I expect that is telling me lower prices are coming.  But yesterday the stock closed above the horizontal trend.  Now I am not sure if my expectation is correct.  I am still leaning towards lower prices in the near future but how should I invest real money?

• My best advice would be to wait and see what happens.  Maybe the best thing to do is not invest in this stock at this time.  Now there is a novel idea.  There is always risk involved in investing so you have to decide how much risk you are comfortable with.  If you decide you want to invest now then maybe use 25% - 33% of the money you want to eventually commit to a TWTR investment or trade.  Start small and wait for the chart to give more definitive information. 

So there are three options : higher, lower, or sideways.  The chart could give us a better idea by the end of the day. 

This is a Daily chart of TWTR