Last week, Twitter (TWTR) announced that it had raised $1.8 Billion in a convertible note offering. This sent the stock higher and gave it some support throughout the week. Twitter closed the week up 2.8%, a very strong performance considering the equity markets were down for the week.
By all accounts, Twitter is striking while rates are still low. But regardless of the merits of the deal, I found one technical nugget quite interesting: TWTR stock closed the week at $52.11, just $0.01 below the 50 percent Fibonacci retracement of it’s all-time high and low prices. This is interesting, because I tweeted about the major Fibonacci retracement levels in late July following a big gap higher on earnings:
$TWTR – Twitter key Fib retrace levels: 46.78 (.382); 52.12 (.500); 57.46 (.618)
— Andrew Nyquist (@andrewnyquist) July 29, 2014
A period of consolidation followed, but once again the stock is knocking on this key level. An inability to close above the 50 percent Fibonacci retracement and a +70 RSI are a bit concerning, so investors will want to watch for a breakout and follow through. If higher, the 61.8 retracement at $57.46 lies in wait. If the stock pushes up to this area, it’s worth noting that the $55-$59 area stands as stiff lateral resistance, representing the late December flag pattern lows, January lows, and February highs.
Trade safe, trade disciplined.
Follow Andy on Twitter: @andrewnyquist
No position in any of the mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
