Below are the intensity scores for the 25 most active stocks on Twitter for the past week and month. Here is the status of the 50 most active stocks on Twitter. 70% have Twitter sentiment reading that confirm bullish chart patterns. Very few bearish stocks over the past week.
Thursday brings with it earnings reports from Morgan Stanley (MS), Google (GOOG), International Business Machines (IBM), and Microsoft (MSFT). Here’s what their Twitter sentiment charts look like ahead of the earnings reports. Morgan Stanley warned of consolidation in mid March and then cleared that warning last week. The consolidation warning was cleared near the stock’s upward sloping trend line coming out of the July 2011 lows. In addition, the 50 day moving average is in play. Smoothed sentiment is trying to paint a positive divergence with price, but we’d like to see it continue to diverge (or start to confirm any upward move) before making any calls on the stock. Overall we have a slight bullish bias. If the stock moves higher after the earnings report and the move is confirmed by sentiment it will provide a low risk entry for a trade on the long side. If the stock breaks lower we’ll be looking for a setup near the 200 day moving average. It took two consolidation warnings from
Below are the charts of the most active stocks on Twitter over the past week and month. Notice that GLD beat Apple (AAPL) this week. This is the first time we’ve seen any stock out pace AAPL. However, we’ve seen activity for AAPL trend lower over the past few months.
Since the first of April it appears that traders are simply chasing price. When smoothed Twitter sentiment paints a similar pattern to price it shows that traders are reacting to price rather than relying on other technical indicators to make trades. Another sign of traders chasing is very wide swings in daily sentiment that follow price. This is somewhat expected when price breaks important support and resistance levels, but isn’t common when price is between major support and resistance points. The break above 1575 on the S&P 500 Index (SPX) painted a positive initiation thrust in daily sentiment. The fall back below 1575 this morning brought a negative initiation thrust. This action in sentiment could simply reflect the move back through that level, but it since it’s occurring with smoothed sentiment mirroring price there is also the possibility it may signal chasing. When traders chase price it causes volatile swings and creates instability. This is a time to be cautious. Twitter sentiment for SPX cleared it’s consolidation warning last week
Below are the stocks with the highest intensity (volume and scores) on Twitter for both the past week and past month.