Time to Refuel

The market seems to be indicating that Twitter handled the potential bidding situation about as poorly as possible, with the desire to be bought, along with potential bidders singled out, all made public. Moreover, the firm then slapped an extremely ambitious deadline on the process, before earnings in just a few short weeks. 

The net result of those actions is that several prominent companies walked away from the situation, and TWTR's stock went from printing a $25 handle to now dipping below $17 this morning. 

At issue now is whether all of TWTR's technical progress since June was for naught. 

The short answer is, as long as $14 continues to hold longer-term, the stock still has a shot to bottom here, especially with recent momentum longs being washed out and confidence in the firm shaken beyond belief by even the most steadfast of bulls. 

As the stock rose in recent weeks, we cautioned Members that the risk of a harsh rug-pull also escalated given how visible and, frankly, telegraphed any potential deal would be. And if no such deal materialized, the floodgates could open to the downside. 

But after that washes away, what do we have left? Twitter still represents value, potentially tremendous value, for a larger firm who knows how to properly monetize it and incorporate it into its own ecosystem. 

From a technical perspective, it is likely correct, after several consecutive monstrous gaps lower, to focus our attention elsewhere on the long side for now. Several days, at least, is likely required for all of this shaking and baking to settle down. 

Put another way, I am more interested in some medical device and technology stocks right now than trying to play Gordon Gekko with TWTR.