Twitter, Inc. (TWTR) Pullback Fails to Deter Bulls

Twitter Inc (TWTR) received another round of positive analyst attention


Published on Feb 9, 2015 at 10:45 AM
Updated on Apr 20, 2015 at 5:32 PM

Twitter Inc (NYSE:TWTR) has slipped 2% this morning to trade at $47.06, despite another round of bullish brokerage notes. Meanwhile, options are trading at roughly 1.3 times the expected intraday rate, and short-term strikes are in demand, per the stock's 30-day at-the-money implied volatility -- which has jumped 5.3% to 44.5%.

Digging deeper, buy-to-open activity is detected at the weekly 2/13 48-strike call, which is TWTR's most popular option so far. By purchasing these out-of-the-money contracts, the traders anticipate the underlying will rally past $48 by this Friday's close, when the weekly series expires. However, today's pullback has delta on the call down to 0.38, compared to 0.51 at last Friday's close.

Despite this morning's technical troubles, TWTR has had a nice run in February. Month-to-date, the shares are up more than 25%, helped by last week's well-received quarterly earnings report.

On the sentiment front, options traders have tilted in a bullish direction when it comes to TWTR. The stock's 50-day call/put volume ratio across the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands at 2.29 -- higher than roughly two-thirds of all comparable readings from the past year.

As alluded to, analysts have also been raising their expectations on Twitter Inc (NYSE:TWTR). Earlier today, Wunderlich and FBN Securities increased their respective price targets on the security to $50 (from $45) and $65 (from $60), with the former reaffirming a "hold" rating and the latter an "outperform" opinion.

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