TWTR closes within prior day's range
Twitter Inc. (TWTR) Technical Analysis Report for Jul 16, 2019 | by Techniquant Editorial Team
TWTR finished Tuesday at 37.99 losing $0.69 (-1.78%), strongly underperforming the S&P 500 (-0.34%). The bears were in full control today, moving the market lower throughout the whole session. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (TWTR as at Jul 16, 2019):
Tuesday's trading range has been $0.97 (2.5%), that's slightly above the last trading month's daily average range of $0.90. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for TWTR.
In spite of a strong opening the stock closed below the prior day's open and close, forming a bearish Engulfing Candle. Additionally, one bearish candlestick pattern matches today's price action, the Black Candle.
Prices broke below the key technical support level at 38.04 (now R1), which is likely to act as resistance going forward. The last time this happened on June 19th, TWTR lost -2.34% on the following trading day. After having been unable to move lower than 37.94 in the previous session, Twitter found buyers again around the same price level today at 37.82.
Crossing below the upper Bollinger Band, prices have lost at least some of their upward momentum in the short-term and could now be heading back down towards the mean of the Bollinger Bands at 36.32.
The share shows strength in the short-term supported by its long-term uptrend with only the medium-term trend being bearish.
Buying might accelerate should prices move above the nearby swing high at 38.97 where further buy stops could get activated.
Among the nine market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Close crossed below the upper Bollinger Band" stand out. Though it is usually interpreted as bearish, it has actually shown to be bullish for Twitter. Out of 45 times, TWTR closed higher 57.78% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after three trading days, showing a win rate of 57.78% with an average market move of 0.45%.