Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications in the United States and internationally.
Take a look at the 1-year chart of Twilio (NYSE: TWLO) below with added notations:
TWLO has run-up against its $150 resistance twice, a level that is also the barrier to a new 52-week high. In addition, the stock is climbing a clear trendline of support. At some point, one of those two levels will break, and that break should signal TWLO’s next big move.
The Tale of the Tape: TWLO has a 52-week resistance at $150, and a trendline of support. The possible long position on the stock would be either on a breakout above $150, or a pullback to the trendline. The ideal short play would be on a break of the trendline.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT