Share of TWTC recently broke a downward trend of resistance at $60 on good volume and then followed through the following trading day, taking the stock through the 200-day MA (thin red) on good volume. Today, the stock has pulled right back to two levels of upward trending support and the 50-day MA (thin blue). We like a bullish trade above $60 with a stop just below at $56.75. MACD looks to be rolling over, but remains above the zero level.
Time Warner Telecom Chart - 60-minute interval.
The 60-minute interval chart of TWTC gives traders a close-up view for a trade in the stock. Currently, we'd wait for a break above $60 before entering positions and see if we couldn't "buy time" for a pullback closer to support near $57. In the current market environment, we'll try and squeeze every dollar before getting bullish. MACD on this time frame looks to be leveling out, but remains below the zero level. Our short-term target would be the 50-period MA near $64 and intermediate-term target of $69.
NASDAQ Telecommunication Index Chart - last eleven months.
We'd think that Ms. Cohen is looking for a turn in fundamentals in the telecom group as the NASDAQ Telecommunications Index (IXTCX) is currently in a major downtrend. If Ms. Cohen believes the tide is changing for this group, we're looking for stocks like TWTC (in an up trend) that may be the "leaders" if the group is to strengthen. Traders should understand the "shape" of the group and be willing to trade stocks in this group when you get a satisfactory profit. Keep losses small and buy near support!