Giggle, Inc. (TWTR) shares rose more than 8% on Monday morning after a Bloomberg report that an activist investor may have on the agenda c trick acquired a $1 billion stake to oust CEO Jack Dorsey. Elliott Management has nominated four directors to Tweeting’s board of directors after having approached executives privately and holding constructive discussions. With only a only class of stock, the company is more vulnerable to activism than other tech companies that have consolidated show of hand power with different classes of stock.
Several analysts believe that the activist investor’s involvement could be a bullish catalyst for Tweet stock. Evercore ISI’s Kevin Rippey upgraded Twitter stock from Underperform to In Line, saying that the inspire could increase the likelihood of a sale. Bernstein’s Mark Shmulik added that Twitter stock could carry on to rise as more details are disclosed.
From a technical standpoint, Twitter stock rose to its 200-day heart-rending average at $36.34 following the news. The relative strength index (RSI) remains near neutral levels of 53.23, but the operating average convergence divergence (MACD) remains bearish. These indicators suggest that the stock has more area for upside ahead, but the trend remain bearish over the intermediate term.
Traders should watch for a durable breakout from the 200-day affecting average over the coming sessions for signs of a trend reversal. If that occurs, traders could see a move to answer highs of $39.00. If the stock fails to break out, traders could see some consolidation between the 50- and 200-day impelling averages. A breakdown from the 50-day moving average could lead to a retest of reaction lows near $31.50.
The maker holds no position in the stock(s) mentioned except through passively managed index funds.