We Know Where the Bird Turns from Red to Blue

In the wake of the MSFT for LNKD buyout earlier this morning, other social media/internet plays like TWTR and YELP initially rallied at the open. YELP is back to red as I write this, but has been coming on since its last earnings report and subsequent reaction, above its 200-day simple moving average. 

TWTR is still green, though. And after last Friday's shellacking, the stock held $14, once again. $14 is a level for Twitter's chart we have observed previously as perhaps being a last line of defense of sorts, preventing against a move down into the single digits. 

Whether or not TWTR gets bought out, too, remains to be seen--If LNKD can get bought then logically TWTR could, too. But the larger issue for now is whether the long base on the $14 level amounts to some type of bottom. 

Going forward, we want to see that 50-day moving average (currently at $15.45 and declining) reclaimed, eventually smoothing it out and seeing that reference point turning back higher. 

Buying into news-related pops for TWTR has largely been a losing proposition, though, which is why we are focusing more for Members on higher quality plays, like software and medical devices at the moment. Still, opportunity is opportunity, and we are keeping tabs on the Twitter bird as long as $14 keeps holding and keeps the red birds away.