Here’s how you trade Twitter (TWTR) and Facebook (FB). (August 02, 2018)TWTR FB TWTR FB
Twitter ( NYSE: TWTR ); here’s the thing: Did you think it was going to zero because I didn’t. Did you think that people are not going to be using Twitter ( NYSE: TWTR ) because of the Cambridge Analytica, Mark Zuckerberg, “I care a lot about your privacy, but not really. Yes, I do but I will have to get back to you on that next time.” No.
Twitter ( NYSE: TWTR ) is a totally different thing. I am not talking about social media and all that. It is the same thing in that they make money on collecting your information. It is just that people use it differently. But more important than that; they think about it differently because you are not giving all this information; right?
The reason I am saying that is this: Part of the reason why Facebook ( NASDAQ: FB ); it became “Faceplant”, is because a certain amount of investors lost faith in the public’s eagerness to keep using Facebook ( NASDAQ: FB ) in the way that they did before. A lot of that, frankly, just comes from reporting their earnings call where they are saying, “We are going to be spending more money on security because we have to.” Sheryl and Mark don’t really want to but they are doing that because you require them to.
They already sold a bunch of their stock so that is all good. Oh, but it was a planned sale; all that stuff. So Facebook ( NASDAQ: FB ) has already told us that they are not really going to be growing. And even THEN the stock has fallen like it did here, and it is stabilizing. But I am not talking about Facebook ( NASDAQ: FB ) right now. Right now this thing has a ceiling of about $180.00 or so and only after it gets above THERE will it start to fill the gap and it is a heck of a gap; 35 points to get back to here. I don’t think it will get back to here for quite a while.
But one thing I know for sure, the market hasn’t asked me what I think. Nobody has asked me what I think. You haven’t even asked me what I think. Even if you did I would say, “I don’t know, you are not going to make money on what I think. You are going to make money on what the stock does.” So, with that said, he is what I THINK you should do on Facebook ( NASDAQ: FB ) and then we will get back to Twitter ( NYSE: TWTR ).
I wouldn’t be too bullish on Facebook ( NASDAQ: FB ) but if you have got some risk tolerance, you’re buying this puppy right here and you have got about a 6 percent stop. Then you are going to sit here and wait and you are going to wait and you are going to wait because this stock is probably going to grind around here for quite a while. Two things here, the mid-term election is only 3 months away or something like that. And the other thing is, Trump doesn’t Facebook ( NASDAQ: FB ). So Twitter ( NYSE: TWTR ) is always going to be talked about.
I don’t really know or care about all the numbers and all that. I don’t have any edge and actually, you don’t either; as far as being able to make a stock trading decision based on how many users Twitter ( NYSE: TWTR ) has or doesn’t have and all that other stuff. Let the smart guys, who work for big firms decide that. We just trade the stocks to make some money.
So this is what I am doing here: I am looking here. The stock has had a heck of a move, triple top here, double bottom here; you could even say triple bottom. Shoot, if you look at this it is a “fourple” bottom. But now the stock is printing these higher lows, higher highs, it is getting volatile. But again, it isn’t Facebook ( NASDAQ: FB ), it’s not Facebook ( NASDAQ: FB ). Also, by the way, where is the logical level of support? Is it $31.00? No. The 200-day moving average. Facebook ( NASDAQ: FB ), the 200-day moving average. No, it is actually like the logical level of resistance.
So with Twitter ( NYSE: TWTR ) here is your trade: You are buying this stock here, kind of like Facebook ( NASDAQ: FB ). You are keeping a 5 percent stop, you don’t even have to make it 5 percent, the stock is not going to come down below 32.00, I don’t think anyway but let’s say it does. You buy a little bit of stock here. You keep a slight stop on it. Don’t take it all the way down below the 200-day moving average, that is 8 percent, 8.5 percent. That is too much room; you don’t have to give the stock that much room because here is the other side of this trade: You are keeping a stop down here, 3, 4, 5 percent wherever, somewhere around here. If you get stopped out don’t throw up your hands and walk away. Watch the stock. You will probably be able to buy it at a lower level. I don’t mind getting stopped out at $31.00 if I can buy it back at $30.00.
So I want you just to watch Twitter ( NYSE: TWTR ). ASSUME that this line is a REALLY solid line. That is how you are going to trade Twitter ( NYSE: TWTR ). When the stock gets back up to $36.00 or $38.00 or so, then you can thank me. But for now just manage your risk; we will worry about taking credit for all of this stuff later.