Whether you’re a day-trader or own Twitter stock in your investment portfolio if you’ve looked at a chart today, by now you have noticed the big jump on the stock. So why is Twitter stock up some 8% to the upside?
Key points:
- Shares of Twitter jumped by more than 8% in US morning session trading on Wednesday;
- During the afternoon session prices hit an intra-day high of $36.98
- The company is working on a subscription platform codenamed, “Gryphon”
- They recently posted a job listing searching for a full-stack software engineer to work on the new platform’s development team.
Shares of Twitter jumped more than 11.3% during Wednesday afternoon’s trading. Before today’s spike Twitter shares were trading just above the 200-day moving average. Yesterday, shares closed at $32.99.
Before this week, the stock was trading under the 200ma and Tuesday’s close above this dynamic trendline was the first indicator of a possible bullish move being setup.
The shares jumped seemingly after Twitter posted a job listing for a developer to work on building a subscription platform codenamed, “Gryphon.”
In the listing, the company did not disclose much about the new platform, except that it will be a subscription platform that will work with its Payments and Twitter.com teams.
Later, after users and investors caught wind of this, the company edited the posting removing any mention of subscription
“We are building a subscription platform, one that can be reused by other teams in the future. This is a first for Twitter! Gryphon is a team of web engineers who are closely collaborating with the Payments team and the Twitter.com team,” Twitter said in its original job posting.
It’s not clear how a subscription service linked to Twitter would work. One path could see followers subscribing for premium tweets from select users whilst the income is shared? Another could see users having the ability to opt for an Ad-free twitter by becoming a premium user.
Whatever the case may be, if successful, a subscription service would help diversify Twitter’s revenue away from advertising.
It would help keep the company stay afloat in the event of a second market crash or another economic downturn such as the 2020 market crash that saw many advertisers cutting down their Ad-spend with the social media giant.
From a technical analysis standpoint, if prices break and close above $36.98 we could see the rally continuing by more than 30% up to about $45 – that’s the case for a bullish scenario.
The alternative scenario is one where buyers fail to break the nearby $37 resistance or the higher $39.50 which could see prices tank and possibly find support above $28.
Indicators, price action and confluences all agree with the case for bullish continuation but Thursday and Friday’s trading would provide more information.