Twitter Inc (NYSE:TWTR) is undergoing a contracting phase not only from the long term perspective but the extreme short term too as it moved indie the previous day’s range for the third consecutive in as many days. Generally this kind of price behavior suggests a storm is coming soon in the form of a big expansion of volatility. The area around $52 is resisting any attempt on the upside since the last week but a successful breakout may take the price to new 52-week high above $56 very fast.
Twitter Inc (NYSE:TWTR) has got a “buy” rating from the analysts of Rosenblatt Securities with a price target of $60 as the company is believed to be successful in driving up its advertising monetization, giving itself an attractive long term growth potential. A 3.5% increment in EBITDA is estimated by -Rosenblatt Securities for 2015 and 2016 as well. Comparing the company with Facebook Inc (NASDAQ:FB), it is considered that the user base advantage of FB is negated by Twitter’s much more specific information details and the specific usage metrics of the two companies are different. The general view of the market regarding the stock is well understood by the 22 recommendations of “hold” and 19 ratings of “buy”.
Technically, one must consider the contraction visible n the chart for the last 15 months. Since last May 2014, no new highs or new lows have been registered and all the moves have just partially retraced the previous ones. Currently the price is showing signs of a probable breakout but most probably, that would be a false breakout and the price may come down once more. As long as the price trades below $55-$56, the possibility of some more sideways range looks higher.
Investors may keep a close watch on the stock and buy it above $56 for a very sharp upside.