Twilio Inc (NYSE: TWLO)

Twilio Inc. provides a cloud communications platform that enables developers to build, scale, and operate communications within software applications through the cloud in the United States and internationally. The company’s programmable communications cloud provides a range of products that enable developers to embed voice, messaging, video, and authentication capabilities into their applications through application programming interfaces.

Take a look at the 1-year chart of Twilio (NYSE: TWLO) below with my added notations:

1-year chart of Twilio (NYSE: TWLO)

Over the past 5 months, TWLO has formed a clear level of resistance to watch at the $35 (red) level. The stock has tested that mark several times since the end of December, while also having been a support in November. A strong close above that $35 level would most likely lead to higher prices for TWLO.

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The Tale of the Tape: TWLO has a key level of resistance at $35. A long trade could be entered on a break through that level. However, if you are bearish on the stock, a short trade could be made on any rallies up to $35.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT

Follow me on Twitter: @cmtstockcoach