Founded in 2006, Twitter Inc. is one of the leading microblogging and social networking site in the world. The stock had an exceptionally strong run between 2016 and 2018. In a little over two years, the share price rose from as low as $13.63to as high as $47.87. That’s 252% gain in two years.
Unfortunately for shareholders, the bulls could not keep that momentum any longer. The past two years brought the exact opposite in terms of returns. In October 2018, Twitter stock fell to $26.28, down 45.5% from its June 2018 high, and currently trading -30% ($32.9) today. What do the next few months have in store for Twitter investors? Let’s hear what the Elliott Wave principle has to say on Twitter’s weekly chart above.
Twitter’s 2016-2018 rally unfolded in a textbook five-wave impulse, labeled 1-2-3-4-5. This pattern means the overall direction of the stock is up. However, a three-wave correction follows every impulse according to Elliot Wave theory. That is what I believe has been unfolding in the last two years.
Twitter Inc. seems to be declining in wave Y of a W-X-Y double zigzag retracement. Since fifth waves are usually fully retraced, it makes sense to expect more weakness in wave ‘c’ of Y. In the mid-term, downside targets near $24 a share are plausible.
On the bright side, once the wave Y downside target is reached, the 5-3 wave cycle would be complete. A reversal for the beginning of the next bull leg should then occur in that area. For now, though, the bears remain in charge. This is not the best time to buy Twitter stock according to the Elliott Wave principle.
What’s your view about Twitter stock?
Unfortunately for shareholders, the bulls could not keep that momentum any longer. The past two years brought the exact opposite in terms of returns. In October 2018, Twitter stock fell to $26.28, down 45.5% from its June 2018 high, and currently trading -30% ($32.9) today. What do the next few months have in store for Twitter investors? Let’s hear what the Elliott Wave principle has to say on Twitter’s weekly chart above.
Twitter’s 2016-2018 rally unfolded in a textbook five-wave impulse, labeled 1-2-3-4-5. This pattern means the overall direction of the stock is up. However, a three-wave correction follows every impulse according to Elliot Wave theory. That is what I believe has been unfolding in the last two years.
Twitter Inc. seems to be declining in wave Y of a W-X-Y double zigzag retracement. Since fifth waves are usually fully retraced, it makes sense to expect more weakness in wave ‘c’ of Y. In the mid-term, downside targets near $24 a share are plausible.
On the bright side, once the wave Y downside target is reached, the 5-3 wave cycle would be complete. A reversal for the beginning of the next bull leg should then occur in that area. For now, though, the bears remain in charge. This is not the best time to buy Twitter stock according to the Elliott Wave principle.
What’s your view about Twitter stock?