I had posted this trade to our Uniquely Toronto Facebook page earlier this week. Am now brining that post to this site. Earlier this week I had purchased 1 Million shares of Twitter Inc on the NASDAQ exchange.
I am also going to split up the trading into two different portfolios. The reason for that is Low Priced shares of rather unknown companies can be a good vehicle for trading. My problem has been that you cannot get large quantity orders filled because their trading volume is too low. That situation could also come back and bite one, when they try to sell or quickly Dump a large number of shares. For example the 1 Million shares of Twitter was no problem to get filled. When I want to sell, it will also not be an issue. I’ll post the other stocks that I had posted about on our Facebook page.
So we’ll have the Regular Portfolio and we’ll have a New Trader Portfolio. The Twitter Trade is part of the Regular Portfolio. The low price shares will go into the New Trader Portfolio. This way I can pick up 1,000 shares without issue. One thing which I had picked up on and is my opinion that the more shares that you can buy, the higher your Potential capital Gains can be – and yes the Higher that your capital Losses can be. IMHO high priced stocks are not as volatile as their low cost cousins.
Ok back to Twitter. Twitter released their latest Quarterly result which beat street estimates. Fundamentals look great. The price had Gapped up – positive Technical sign especially when the price is in an extended Up Trend. So I bought One Million shares of TWTR on Nasdaq for an average cost of $39.30 per share.
Note the Low made on July 24 2018 at $41.59. That is my initial Target. There is greater resistance just above at $42.50 – another target would be just below that, say at $42.40. If the price fills that prior gap made on June 11 2018 then the next major resistance is at $45.00. The High Made on July 09 2018 at $46.90 is the next Target. IMHO in time the price of TWTR could break above that prior High. The next resistance would at $50.00, so I would sell at say $49.40. IMHO TWTR has nice potential for a nice Capital Gain over a bit of longer term. This was not bought for Day Trading or Swing Trading. This was bought to try and capture the Capital Gains under the “Investment” clause of the Tax act and so I would get 50% of the Capital Gain TAX FREE (in Canada).
After a Gap Up, a stock price will consolidate for a few days before continuing on it Up Trend. The price usually create a flag or pennant formation before moving up higher again. It’s just a matter to patiently wait…
The following is what I had posted on FB on Apr 23 at 10:02 pm:
“Buying a million shares of Twitter at open tomorrow Apr 24. TWTR on Nasdaq. Resistance is the bottom on the Gap formed on July 24 2018 ($41.59). That could be a target to get out. If it breaks up thru the resistance then next resistance is at $46.75 to $46.90. If it breaks upward past $47.79 then looking for $50.
Why am I buying? Strange for me, but because of Fundamentals. Twitter’s quarterly report surpassed Analyst Expectation. You also have the Twitter promoter in the White House who gets Twitter mentioned in the news almost on a daily basis. On top of Fundamentals the CCI looks great. So in my opinion I am buying because of Fundamentals and also because of Technicals.“
Disclaimer: I am not an registered Stock Analyst nor a licensed Stock Advisor. This post is not a suggestion for anyone to buy anything. Please seek the advice of your own licensed Investment Advisor before placing bets at the Stock Market Casinos. You can lose money – even all of it. This post is for my own educational purposes..
Posted by Vincent Banial