For Whatever The Reason Twitter Is Soaring

em>Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show.

Twitter Inc. TWTR shares are trading sharply higher by $1.85 at 52.69 in Tuesday's ression. The massive rally may be attributed to two different causes. First of all, and the least likely is unconfirmed chatter that Twitter may be the target of a takeover. As always, when rumors like this surface, aggressive traders buy with reckless abandon sending shorts scrambling for cover. The other and more plausible reason,, is a good old fashioned technical break out to the upside. After clearing the major resistance at the $50 level on March 24 reaching $51.79, the rally stalled the following day at $51.87 and with the assistance of downgrade by Pivot Research, the issue returned to the former breakout level ($50) and consolidated at that level for five days. Over the next three trading sessions, it grinded to the $51 level before soaring in today's session. After a higher open (Monday's close of $50.84 vs, Tuesday's open $51.01), it retreated and found support just above the close, only reaching $50.86 before taking off. Coincidentally, the rumors surfaced just as Twitter was approaching its major resistance level. Without hesitating it blasted through that level as well as the institutional sellers at $52.00 and has reached $52.80 and is not backing off that level. If the rally continues, it hard to identify a major resistance point, since the next identifiable resistance level stands at its October 10 high ($55.56). The steep decline that day (falling from $55.29 to $50.400 was attributed to an all out assault on social media stocks.