A month ago, the near-term outlook for Twitter Inc TWTR 2.05% bulls was looking fairly bleak. However, in the past few weeks, the stock has broken out of a bearish head-and-shoulders pattern and is now trading at 2017 highs near the $20 level.
Here are the technical levels that traders should be watching.
Back on June 8, Benzinga reported on the bearish head-and-shoulders formation in Twitter’s stock. At the time, we pointed out that it would be difficult for Twitter bulls to make a solid argument for a bullish breakout unless the stock trades above $20. But with the stock set to close right near the $20 level, that bullish breakout could now be imminent.
It has been nearly a year since Twitter has traded above $20. The last time Twitter made a sustained push above $20 was last year, when a swirl of Twitter buyout rumors were being reported seemingly on a daily basis. After those rumors came and went with no deal announced, Twitter dipped back below $20 to as low as $14.12 in April 2017.
Twitter made two attempts to break above $20 since October 2016. The first rally stalled at $19.84 in December 2016, and another rally peaked at $19.78 in May 2017. Twitter came agonizingly close to the $20 level in early Friday trading, surging as high as $19.97 before pulling back slightly.
If Twitter follows through with a break of $20, the next major resistance could be 2016 highs in the $25 region. However, if the rally for $20 stalls for a third time, expect shares back down below $17 in the months ahead.
At least one option buyer placed…
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