$TWLO Begins Its Mega Bounce...Shares of Twilio Inc (NYSE:TWLO) bounced hard on Tuesday. This was the first big up day in weeks and likely marks a major bottom in the stock. Not only was it a significant bounce, but more importantly it was a strong bounce in a sharply lower market. This adds credence to the idea that it is a major turning point for a big move up. The stock has collapsed from $70 to its current level with no bounces. If this bounce takes hold as expected, upside is likely a move to $50.00.
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TWLO trade ideas
TWLO breakout above trend line resistanceTWLO broke out today and volume is tracking slightly above average. There are actually multiple breakouts on this chart...
1. Trend line breakout
2. Break above the 5ema
3. Break above resistance at 59.40
4. Break above resistance at 60.69
I like the 56.50 level as near term support. That is the point were the 5ema just crossed back above the 10ema and was yesterday's low.
PREMIUM SELLING: TWLO OCT 21ST 45 SHORT PUTI generally don't like to ride broncos right out of the stall, but I might make an exception here ... .
This is because the Oct 21st 45 short put is currently bid 3.00, ask 3.80 (mid 3.40). That's $340 in premium for a one contract 58 and change underlying ... .
Alternatives:
Sept 16th 45 short put: bid .95, ask 1.11, mid 1.03.
Oct 21st 40 short put: bid 1.65, ask 2.10, mid 1.87.
I wouldn't be looking to acquire here, but rather to just squeeze some premium out and would look to take it off at 50% max profit. Broncos can make for an awfully rough ride ... . Ordinarily, I'd strangle this, but am hesitant to take on potential upside risk if this becomes a rocket sled sorta thang ... .