Twitter, Inc. (TWTR​) shares have risen more than 7% since the beginning of the week in what appears to be a technically driven breakout following a deal with Bloomberg.

Last week, Axios reported that Bloomberg would bring a news network to the social media website with six partnerships averaging $1.5 million to $3 million in price. The first 24-hour news program on the Twitter platform is designed to help Bloomberg better monetize Twitter, with the support of The Goldman Sachs Group, Inc. (GS), CA Technologies (CA) and AT&T Inc. (T) as founding partners. The move could open the door to similar deals with other media companies.

In addition to this partnership, Twitter has been making significant changes to its platform to remain relevant compared with other social media platforms. The company announced that it would double its 140-character limit to attempt to increase followers and engagement after a beta test that lasted throughout September. Last quarter, the company also announced strong financial results that suggest its turnaround is gaining traction. (See also: Twitter Buying Volume Predicts Long-Lasting Bottom.)

Technical chart showing the performance of Twitter, Inc. (TWTR) stock

From a technical standpoint, the stock rebounded from pivot point support at around $19.79 to retest upper trendline resistance at around $22.30. The relative strength index (RSI​) moved to overbought levels at 72.39, but the moving average convergence divergence (MACD​) experienced a bullish crossover after a period of consolidation. Traders should remain cautious on the stock given the lofty RSI reading and the key resistance levels ahead.

Traders should watch for a breakout from trendline and R1 resistance at $22.80 to R2 resistance at $24.97. If the stock fails to break out, traders should watch for a move to pivot point support at $19.79. A breakdown from these levels could validate a double top pattern and signal a move down to lower trendline and S1 support levels at $17.61. Traders should also keep an eye on the volume behind these moves, which has been relatively low during the rally. (For more, see: Twitter Surges on Q3 Results: Log in to These ETFs.)

Chart courtesy of The author holds no position in the stock(s) mentioned except through passively managed index funds.

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