Everyone knows Twitter (TWTR) has been one of the most volatile IPO’s in decades.
Twitter shares went public at $45, slipped to $40, and then went on a huge run $75 in less than a month.
Now TWTR has formed what traders call a bullish flag or pennant pattern. This pattern occurs after a huge run up in a stock, then the stock pauses and drifts down slowly, as the stock becomes oversold and buyers become exhausted.
The stock will complete the pattern if Twitter rises above $62.50. Once it moves above that price, it should rapidly back up to $75, the stock’s recent highs. Moreover, Goldman Sachs has just raised its price target on Twitter from $46 to $65, a 41% increase on 1/13/2014.
Everyone knows price targets are just made up numbers that analysts create. But the one important thing you should pay attention to when an analysts move their targets, is the percentage move in the price target. In this case, a 41% price target hike is huge move and is extremely bullish.
Now, Goldman is known to move stocks, especially the sentiment on a stock. And as I said, technically, I believe Twitter will trade back up to test its recent of high of $75 very soon, probably before the end of the month is over.
President of The Billionaires Portfolio
Providing Sophisticated Hedge Fund Strategies and Analysis For The Everyday Investor