Is Twitter a sinking ship? Or is its declining stock price a huge opportunity for traders looking to capitalize? That’s a tough question, and one that can likely not be answered with just a few words, but this blog entry will attempt to look at some of the more important facts about the company, and hopefully give you some guidance on how to trade the company in your binary options routine.
First, it would be foolish to ignore that Twitter is behind in terms of social media popularity right now. Twitter is currently playing second fiddle to other social media sites like Facebook and Instagram, but Twitter plays a very unique role within social media, one that these other two companies do not take on. For one, Twitter is short by nature. People spend a lot less time on this site because of the fact that they have other stuff going on.
But Twitter has a lot of business-to-business potential, and while Facebook and others really play up the “social” side of things, Twitter is great for businesses trying to learn about and communicate with other businesses. And this has profit potential written all over it.
Fundamental and Sentimental Data
Twitter is not the healthiest of companies right now, and this plays a large role in why they are currently experiencing a downward trend. Although the tech sector and the NASDAQ are all rising, Twitter is still in a bearish state. It was also recently announced that one of the execs within the company is parting ways with Twitter. These things do not do a thing to help the company improve how its viewed by the public. The company has had recent quarters where earnings per share were negative numbers, which is a clear sign of decline and could even lead to bankruptcy if not corrected.
However, it is possible that a strong leadership team can fix the company. But because that could be months or even a couple years away from being implemented, it seems like unless something extreme happens soon, the trend for Twitter will continue to be a gradual bearish one. Keep your eyes on the news and on the fundamentals of the company so you can be one of the first to know if and when this trend changes.
What the Analysts Say
Current polls show that Twitter is ranked a solid 3 on the 1-5 scale, where 3 means to hold the company. This means that Twitter is likely range bound, and not likely to experience any significant ups or downs in the near future. Until this changes, that’s actually a good thing for binary options traders. It means that price action is more predictable as no extremes are foreseen for the time being. When the price hits the top of its range, you take out a put option. When the price hits the bottom of the range, you take out a call option. A lot of traders thrive on volatility, but in the case of an established company like Twitter, this is not a good thing. While volatility works with other assets, in this case, traders should be excited to see the range that Twitter is expected to maintain.
Over the coming year, analysts believe that the price will vary anywhere from $10 per share to more than $27. Right now, the company is sitting just slightly below the halfway point here at just under $18 per share. There is room for the company to move either way, but over the last several weeks, the company has stayed between $17 and $19.50. Again, this pronounced range is a strong tool for binary traders to look at.