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TWTR appears to be bottoming.

Back on October 24th shares of Twitter took a major hit following a rather disappointing Q3 earnings report: . The stock finished the session with its worst loss of the year after opening with a huge downside gap. TWTR has drifted lower since but the downside momentum has eased lately. A major support zone near the $28.00 area is beginning to show signs of strength.

At the early November lows TWTR reached deeply oversold territory as shares dipped below the Feb/March lows. This level($29.40) is the top band of a major support zone. The lower band is marked by the 2019 lows($27.85) set back on January 2.

After dropping over 36% from the September highs we believe TWTR is setting up for a rebound. The stock is a fairly low risk buy at current levels. At previous oversold readings similar to the current one TWTR has put in significant lows. On the downside a close below $27.00 would clearly violate the 2019 lows sending a clear warning sign that more basing is ahead.

At time of publication we are long TWTR in some managed accounts.