There is an old market adage that says that the best moves come from failed moves. Today, I'm going to give you an example of a failed move in a stock that almost everyone knows.
That stock is Twitter (NYSE:TWTR), which as you know, has been one of the strongest stocks in 2018. In January of this year, TWTR was trading as low as $23.68 a share. Then it started to rise and traded as high as $47.79June 15, 2018. That's a 100% gain in just six months. Then Twitter began to trade sideways for a little over a month's time forming a bullish consolidation pattern. It should be noted that bullish consolidation patterns usually signal a major upside breakout is on the horizon. Unfortunately, TWTR plunged lower after its earnings report, breaking the bullish pattern. This tells us that the stock wants to go sharply lower. Often failed moves lead to significant downside and that is evident in the current TWTR stock price. Today, Twitter is trading lower by $1.93 to $32.18 a share.
Support To Watch
TWTR will have some daily chart support coming up around the 200-day moving average, which is around $30. If this level fails to hold as support then traders will have to look lower toward the $25.00 area. This trade level is where the stock broke out in February 2018. Often, prior breakout levels are defended when retested.
