Twitter (TWTR) Set to Rebound on Favorable Analyst Call
Shares of Twitter, Inc. (TWTR) rose 2% during Wednesday’s session after MKM Partners upgraded the stock to buy and raised its price target to $60 per share.
Key points to remember
- Shares of Twitter rose during Wednesday’s session after MKM Partners raised its price target from $47 to $60 per share.
- Analyst Rohit Kulkarni believes last year’s headwinds will reverse in the new year, while the company is well positioned to benefit.
- The stock might rebound in the middle of its rising price channel given the Relative Oversold Strength Index (RSI), but the Moving Average Convergence Divergence (MACD) remains in bearish territory.
Analyst Rohit Kulkarni believes that the negative sentiment and headwinds of the past year could reverse in the new year. The analyst believes the company will enjoy the greatest incremental advantage over its peers as brand advertisers ramp up ad spend and live events and product launches return to their normal cadence.
The move comes a day after Wells Fargo reiterated its Equal Weight rating and lowered its price target from $47 to $43 per share. Analyst Brian Fitzgerald believes President Trump’s account deletion could affect engagement, saying Trump was a unique driving force for activity and engagement on the platform.
An action that has a equal weight rating means that a stock analyst believes that the company’s share price will behave in line or similar to the benchmark index used for comparison purposes.
From a technical standpoint, the stock has rebounded from reaction lows recorded earlier this week. The RSI is near oversold levels with a reading of 36.93, but the MACD is in a downtrend. These indicators suggest that the stock could see a rebound in the short term, but the medium-term trend remains bearish.
Traders should watch for a close above the 50-day moving average at $48.29 as the stock moves towards the middle of its price channel. If the stock breaks down from this week’s lows, traders could see a move towards trendline support near $45.75. If the action bounces higher, traders could see a new price channel forming with a high of $58.00 and a low of $45.75.
The essential
Shares of Twitter rose during Wednesday’s session after MKM Partners upgraded the stock to buy and raised its price target to $60 per share; however, not all analysts are equally confident of a quick recovery. With the RSI near oversold levels, traders could see the stock forming a new price channel that will guide short-term trading.
The author does not hold any positions in the stocks mentioned, except through passively managed index funds.