4 Trade Ideas for Twitter: Bonus Idea

Here is your Bonus Idea with links to the full Top Ten:

Twitter, $TWTR, has been all over the news the past 3 weeks since Elon Musk disclosed ownership of over 9% and made an unsolicited bid for the company. Prior to the disclosure the stock had already started to turn higher after retracing 78.6% of the rise from the pandemic low to a February 2021 top. The pop following the bid brought the stock up near the 200 day SMA and it comes into the week with the Bollinger Bands® opening to the upside on the weekly chart below.

The RSI is rising into the bullish zone with the MACD crossed up and moving higher, but still negative. An AB=CD pattern would complete at 92.25. There is resistance at 51.75 and 55.75 then 61 and 67 before 72. Support lower comes at 45 and 41.50. Short interest is moderate at 5.1%. The stock does not pay a dividend. The company will be reporting earnings April 28th before the open.

The April 29 Expiry options chain shows the biggest open interest from 45 to 43 then 40 on the put side. On the call side it is biggest at 50 and then 55 and 60. The at-the-money straddle implies a 12% move for the week, greater than the 7% move following the last 6 earnings reports. The May options chain shows biggest open interest at the 45 and then 40 put and at the 50 and then 55 strikes on the call side. The June options are biggest at the 52.50 and 50 puts then the 40 strike. On the call side open interest is biggest at 50 and then slowly tails to 60.

Twitter, Ticker: $TWTR

Trade Idea 1: Buy the stock on a move over 50 with a stop at 44.

Trade Idea 2: Buy the stock on a move over 50 and add a May 48/40 Put Spread ($2.80) while selling the June 55 Calls ($2.60).

Trade Idea 3: Buy the May 52.50/April 29 Expiry 55 Call Diagonal ($2.00) and sell the May 35 Put (45 cents).

Trade Idea 4: Buy the May 35/50/55 Call Spread Risk Reversal ($2.40).

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After reviewing over 1,000 charts, I have found some good setups for the week. These were selected and should be viewed in the context of the broad Market Macro picture reviewed Friday which with 1st Quarter earnings reports starting to pick up, saw equity markets starting to turn ugly.

Elsewhere look for Gold to consolidate in its uptrend while Crude Oil consolidates its move higher. The US Dollar Index continues to trend to the upside while US Treasuries trend lower. The Shanghai Composite looks to continue to move lower along with Emerging Markets. The Volatility Index looks to remain elevated and possibly moving higher still making the path harder for equity markets to the upside.

Their charts look weak, especially on the shorter timeframe with the SPY, IWM and QQQ all closing at 5 week lows after two consecutive days of large moves lower. On the longer timeframe both the QQQ and SPY are also starting to look like the path lower is the easier route, while the IWM remains in the lower range. Use this information as you prepare for the coming week and trad’em well.

If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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