Bears Go For Twitter As Trump Tensions Tighten

TWTR is butting up against its year-to-date breakeven level

Deputy Editor
Jun 1, 2020 at 1:12 PM
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Over the last 10 trading days, the 20 stocks below have attracted the highest weekly options volume, thanks to data courtesy of Schaeffer's Senior Quantitative Analyst Rocky White. Stocks highlighted in yellow are new to the list. Standing out this week is Twitter Inc (NYSE:TWTR), a company that recently made headlines after applying a fact-check notice to U.S. President Donald Trump's tweets regarding voter fraud. Below, we'll take a closer look at the options activity surrounding TWTR and see how its been performing on the charts lately.

 

Looking at White's data, over the past 10 days, 363,899 calls and 230,219 puts have exchanged hands. While calls are still outnumbering puts on an overall basis, puts have been unusually popular in the options pits, per TWTR's 10-day put/call volume ratio of 0.54 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits higher than 98% of other readings from the past year. In today's trading, the weekly 6/5 30-strike put is most popular, followed closely by the 32-strike call in the same series, with new positions being opened at the latter.

When we last checked in on TWTR, the stock was ramming against the $30 level in an attempt to break higher. It eventually broke free of this region later in the month, conquering its 80-day moving average, which is now acting as a solid layer of support. The 320-day moving average still looms overhead for TWTR, however, as well as its year-to-date breakeven near the $32 level. The stock is up 2.2% at $31.63, at last check. 

Analysts are less than optimistic about the equity, with just four out of 25 in coverage sporting a "strong buy" rating. Meanwhile, the remaining 21 carry a lukewarm "hold". Plus, the 12-month consensus target price of $29.99 is a 5.3% discount to current levels, which could signal some price-target hikes in the near future. 

 

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