Chart Wars, Twitter Vs. Meta Platforms: How Has Elon Musk's Role As Shareholder Influenced Stock Price?

Meta Platforms, Inc FB and Twitter, Inc TWTR were trading flat on Thursday morning, in tandem with the general markets, which were consolidating Wednesday's steep sell-off.

Tech stocks have seen a sharp rebound over the past few weeks, with the Nasdaq soaring almost 18% between March 15 and March 29 before entering into a period of consolidation.

The discovery of war crimes and human rights atrocities in newly liberated cities and towns in Ukraine, in addition to traders and investors becoming jittery in anticipation of how the market would react to the release of the Federal Reserve’s monthly minutes on Wednesday contributed to the most recent market weakness.

Meta and Twitter have pulled back in sympathy with the S&P 500 over the past two trading days, but the slight decline, paired with prior price action, has settled the stocks into bullish patterns on the daily chart, with Meta forming a cup-and-handle pattern and Twitter creating a bull flag.

It should be noted, however, that events affecting the general markets, negative or positive reactions to earnings prints and news headlines can quickly invalidate patterns and breakouts. As the saying goes, "the trend is your friend until it isn't" and any trader in a position should have a clear stop set in place and manage their risk versus reward.

In The News: Twitter has been in the headlines all week, after Tesla, Inc TSLA CEO Elon Musk became the largest shareholder of the company with a 9.1% stake. On Tuesday, Twitter announced Musk would join its board, giving the billionaire some influence over company decisions.

Musk has a hand in multiple businesses across various sectors but Twitter is his first foray into social media. Some Meta traders and investors hoped it wouldn’t be his last entry into social networking, and on Wednesday a fake screenshot was circulated showing a verified Elon Musk account responding to Meta CEO Mark Zuckerberg as to whether he could buy the company.

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The Meta Chart: Meta has settled into a cup-and-handle pattern, with the large rounded bottom cup formed between Feb. 3 and April 4 and the handle forming over the days that have followed. The measured move, if the pattern is recognized, is about 27%, which indicates Meta could soar up over the $280 level in the future.

• Traders can watch to see if Meta breaks up from the handle portion of the pattern on higher-than-average volume over the coming days, and a break from the pattern could signal a solid entry point for bullish traders.
• If Meta completes the measured move of a break from the pattern, the stock will enter into the overhead gap that exists between $248 and $316.87. Gaps on charts fill about 90% of the time so it’s likely Meta will rise up even further to fill the empty range in the future.
• Meta has resistance above at $230.31 and $244.61 and support below at $216.15 and $200.

The Twitter Chart: On Monday, Twitter gapped up over 20% higher and ran a further 12.5% higher over that day and the day after to reach a high of $54.57. The rise, paired with the downward consolidation that took place on Wednesday has created the bull flag pattern.

• Like with Meta, traders and investors can watch for Twitter to break up bullishly from the upper descending trendline of the flag formation on higher-than-average volume to gauge whether the pattern is recognized.
• The measured move of the pattern is about 40%, which indicates Twitter could surge up toward the $70 mark in the future.
• Twitter has both a gap below and a gap above on its chart. The lower gap exists between $39.85 and $46.86 and the upper gap between the $60.16 and $60.94 range.
• The stock is trading just slightly below the 200-day simple moving average and if Twitter is able to regain support at that level, it would give bullish traders more confidence going forward.
• Twitter has resistance above at $52.42 and $55.45 and support below at $49.12 and $44.40.