TWTR update

I spoke of the TWTR setup and that TWTR shareholders are risk adverse. Well it broke through $38, so as mentioned those who held should have stopped out not too much lower than that. The next spot is around 35 to consider trying again. The stock is still currently oversold. I like the setup here with it rejecting lower prices at $35, the problem is there is substantial resistance overhead at this point. While oversold could lead to a sharp rally and a move above resistance could result in a breakout, the unfortunate fact is that it could remain rangebound for awhile. Those looking to play stock, that's fine. Those looking to play options that is a problem.
A move above $40 takes the stock more neutral but the upside momentum probably makes that positive. A move above $42 puts the bulls more firmly in control but by then the stock will be pretty far stretched to the upside. The entry I like to take would be the lower one near support, but I don't really like options here as much even though sentiment is extreme, the stock is oversold, the implied volatility is still relatively low. The two things holding me back are the volume profile suggests resistance overhead and not much price history in the current zone, the price action suggests room for further consolidation and a better timing setup in the future, and the market currently has a vix above 16 which is not terrible but still makes things a bit more uncomfortable as the market tends to be a bit more choppy and containing correlated selloffs where it fails to really have individual names stand out from the pack.
So it could easily form some kind of shorter term bottoming pattern within the falling wedge before it breaks out.

From the context of the low, the stock could very easily put in a higher low longer term and possibly even reject the week of July 14th low on a weekly closing basis if it gets enough strength. So although there is plenty of fear that the stock is overvalued and the next leg of the downtrend is here, this has happened time and time again only to reverse course and I would not be surprised.

If you are interested in TWTR, the stock still offers a decent risk/reward here but you have to be a lot more patient on the longside. The downside is a couple bucks per share this time, and I would aim for big upside still as before, but it will likely take a lot longer than it would have if it had not broken down first. However, the possibility that the stock slingshots higher from here and traps the bears is still possible. Nevertheless I would be nervous with options and certainly would want to risk a lot smaller percentage amount and/or grab a lot more time and manage risk more carefully.
Sellers regain control below maybe around $33 or lower but for now the stock should be relatively neutral with plenty of resistance overhead that may not hold due to the oversold condition. Buyers really don't regain until $42 as mentioned.