TWTR Stock Stays Above Key Technical Levels Despite Price-Target Cut

Most analysts were already skeptical of TWTR stock

Jun 13, 2019 at 10:14 AM
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Just two days after weighing in on rival Facebook (FB), Moffett Nathanson is now taking aim at Twitter Inc (NYSE:TWTR), cutting its price target to $25 from $28 on concerns the company isn't spending enough on security. But even though TWTR shares have dipped 2.7% out of the gate to trade at $36.44, they're still holding above a few key levels on the charts.

Specifically, the stock continues to trade above or near the $36 level, which was a former level of resistance that has since turned to support after the April bull gap. What's more, TWTR is still above the 80-day and 320-day moving averages, two trendlines that caught the equity's brief dip earlier this month. Overall, Twitter is up 28% year-to-date.

Not to mention, this technical success has come despite a broader downbeat view from analysts, with the vast majority already putting "hold" or "strong sell" recommendations on the shares. There also appears to be some hesitation in the options pits, since peak front-month open interest is at the June 40 call, with more of these positions crossing at the bid price -- hinting at sell-to-open activity, which would be betting on the $40 level acting as a ceiling.

Either way, for those wanting to speculate on the social media stock with options should know the Schaeffer's Volatility Index (SVI) of 36% ranks in the low 7th annual percentile, signaling unusually low volatility expectations at the moment. Traders are actually taking action today, targeting the aforementioned $36 level by focusing on the weekly 6/14 36-strike put.

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