Twitter Stock Drops Before Earnings Report

TWTR is up 15.3% year-to-date

Deputy Editor
Jul 22, 2020 at 2:20 PM
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The shares of Twitter Inc (NYSE:TWTR) are down 0.2% to trade at $36.95 at last check, ahead of the company's second-quarter report, which is due out before the open tomorrow. Below, we will take a look at the equity's latest performance on the charts, and explore some of the options activity surrounding TWTR ahead of the event. 

TWTR has recovered fairly well since a security breach targeting high-profile, verified accounts saw the stock dip slightly last week. In fact, Twitter stock neared its multi-month high of $39.64 yesterday, before settling right above the $37 level. Elsewhere, the equity was caught by its 80-day moving average along with the $28 level, when it pulled back to both marks in late June. Year-to-date, Twitter stock is ahead 15.3%, though year-over-year the equity is still down 2.5%.

TWTR Chart July 22

Still, options bulls are circling TWTR. The equity's 50-day call/put volume ratio of 2.65 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) sits in the elevated 66th percentile of its annual range. In other words, calls are being purchased up at a quicker-than-usual clip. 

A look at Twitter stock's post-earnings moves during the past two years shows a mixed bag, with 50% of reactions positive. The equity has averaged a post-earnings swing of 14.3% over the last eight quarters, regardless of direction. This time around, the options market is pricing in a similar move of 14.8% for Thursday's trading.


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