Twitter stock is ripping higher with Tesla CEO Elon Musk taking a near-10% stake in the company. Here are the key levels to know now.
Twitter (TWTR) – Get Twitter, Inc. Report stock quickly became the top focus on Wall Street on Monday, as Tesla (TSLA) – Get Tesla Inc Report CEO Elon Musk acquired a near-10% stake in the company.
While many expected a sell-the-news reaction from Twitter stock this morning, that hasn’t been the case. Instead, shares are up roughly 29% on the day as it continues to grind out new session highs.
In other words, it’s giving a real jolt to the stock price, as one Real Money contributor noted.
With the rally, the stock is hitting its highest level since November. It’s also giving a boost to the wounded social media space, as Meta (MVRS) – Get Meta Report, Pinterest (PINS) – Get Pinterest, Inc. Class A Report and Snap (SNAP) – Get Snap, Inc. Class A Report are all higher on the day.
For those unaware, Musk has a rather large presence on Twitter. His 80 million followers makes him the eighth-most followed user on the platform and the top-followed CEO.
Despite his large following, Musk has not been pleased with the way Twitter has operated lately. With the investment, he becomes the company’s largest shareholder.
Now what does that do to the stock?
Trading Twitter Stock
Weekly chart of Twitter stock.
Chart courtesy of TrendSpider.com
Given the size of today’s move in Twitter stock, I wanted to zoom out with the use of a weekly chart. Today’s move is quite promising, in my opinion.
Not just because Musk of all people took such a huge stake in the firm — more than quadrupling co-founder and former CEO Jack Dorsey’s stake — but because Twitter stock continues to rally on the news.
Today’s rally would have been ripe for some sort of profit-taking reaction to the news. Instead, it simply continues to gain momentum. That said, I am a bit cautious here and if I were long, I’d trim some of the position into this move.
That’s as shares not only climb into the notable $50 level, but also as the weekly and monthly VWAP measures come into play. If it can continue higher, the 50-week and 21-month moving averages come into play near $52.50.
That said, if Twitter stock is able to clear these marks, there will be more room to elevate. Specifically, the $60 to $62 zone could be in play in that scenario.
In that zone, Twitter stock finds long-term downtrend resistance (blue line), as well as the 61.8% retracement from the 2022 low to the 2021 high.
This stock is quite strong at the moment, but as it pertains to the downside, keep an eye on this week’s low of $46.86. Below that and the 200-day moving average stands out.
As of 2:00 ET, Twitter stock has traded almost 200 million shares. That’s more than 20% above the last two weeks combined and we’re still not done with the session. That speaks to the strength of today’s move.
