Twitter Stock Falls as Senate Grills Social Media Execs

Twitter, Inc. (TWTR) shares fell more than 5% on Wednesday morning after CEO Jack Dorsey testified before the Senate Intelligence Committee. Dorsey mentioned that the company identifies 8 million to 10 million suspicious accounts each week and stops over half a million malicious users from logging into the platform every day, but he admits that the company was unprepared for a relatively small number of bad-faith actors.

In addition to Twitter, Facebook, Inc.'s (FB) Sheryl Sandberg is testifying, and its stock moved nearly 2% lower in early trading as a result. Sandberg admitted that Facebook was too slow to respond to Russian election interference but indicated that the company was getting better at responding to threats. Investors are concerned that these admissions could be used to justify new oversights on social media platforms.

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

From a technical standpoint, Twitter's stock broke down from its pivot point at $34.22 to S1 support at the 200-day moving average at around $32.00. The relative strength index (RSI) remains in neutral territory with a 39.11 reading, but the moving average convergence divergence (MACD) could experience a near-term bearish crossover. These indicators suggest that the stock could see more downside ahead.

Traders should watch for a breakdown from key support levels at around $32.00 to S2 support at $29.41 over the coming sessions. If the stock rebounds from these levels, traders could see a move higher to retest pivot point levels at $34.22, but that seems less likely given the recent bearish sentiment. A breakdown from S2 support could lead the stock to retest lows at closer to $27.00 over the coming sessions. (For more, see: Twitter Shares Could Hit $52 Within a Year: Citron.)

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

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