NEW DIRECTIONAL PUT PLAYS
Twitter, Inc. - TWTR - close: 54.02 change: +0.14
Stop Loss: 56.15
Current Option Gain/Loss: Unopened
Time Frame: 3 to 5 weeks
New Positions: Yes, see below
Why We Like It:
TWTR is considered part of the technology sector. This micro-blogging platform is one the major social media services that Wall Street likes to talk about. Today some of those headlines were about TWTR's service crash, the second time in nine days. I doubt the outage was seriously affecting the stock price today. The stock's post-IPO surge is over. The most recent earnings report was a disappointment. The dead-cat bounce from its earnings drop is over. TWTR has developed a bearish trend of lower highs.
TWTR currently has 544.7 million shares outstanding. There is a major lock up expiring on May 6th when another 474 million shares will come available for sale by insiders. It seems unlikely that TWTR is going to rally ahead of such a massive lock up expiration.
TWTR can be a volatile stock. Therefore we are suggesting small positions to limit risk. Buy puts at the opening bell tomorrow. We will start with a stop loss at $56.15 since the $56.00 level looks like short-term resistance. Our target is $50.25.
- Suggested Positions -
Buy the Apr $50 PUT (TWTR1419P50) current ask $1.90
Entry on March -- at $---.--
Average Daily Volume = 11.4 million
Listed on March 11, 2014