Twitter (TWTR) Gains as JPMorgan Calls It a 'Top Pick'

Twitter, Inc. (TWTR) shares rose more than 3% during Wednesday's session after JPMorgan upgraded the stock to Overweight with a $65.00 price target.

JPMorgan's Doug Anmuth is bullish on online advertising next year and believes that Twitter will show the biggest rebound given its sharper pandemic-driven ad decline. The analyst believes that Twitter stock trades at a "substantial discount" to Snap Inc. (SNAP) and Pinterest, Inc. (PINS), and he prefers Twitter's risk-reward balance.

Last week, Twitter stock jumped after Snap announced a native Twitter integration that would bring tweets into Snapchat as an interactive embed. The move provides a better user experience for those taking screenshots of tweets by enabling those logged in to both services to share tweets seamlessly in Snapchat.

From a technical standpoint, Twitter stock broke out from prior highs during Wednesday's session. The relative strength index (RSI) moved further into overbought territory with a reading of 78.90, but the moving average convergence divergence (MACD) remained in a strong bullish uptrend. These indicators suggest that the stock could see some near-term consolidation, but the intermediate-term trend remains bullish.

Traders should watch for consolidation above prior highs of $52.93 over the coming sessions. If the stock breaks down, traders could see a move toward trendline support at $43.75 or the 50-day moving average at $46.49. If the stock extends its rally, traders could see a move toward trendline resistance at $58.40 over the coming sessions.

The Bottom Line

Twitter shares moved higher during Wednesday's session after JPMorgan upgraded the stock to Overweight with a $65 price target. While the stock moved further into overbought territory, the intermediate-term trend remains bullish. Traders should watch for some consolidation between prior highs of $52.93 and trendline resistance at $58.40 over the coming sessions.

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