Twitter (NYSE:TWTR) stock fell nearly 11% yesterday after they missed their earnings expectations. Is this a dip opportunity for your portfolio, or is there more downside to come?

Quarterly earnings

The revenue for the third quarter of 2021 was $1.28B. This includes ad revenue of $1.14B, up more than 40% year over year. The company announced a loss of $537M after a lawsuit settlement of $800M hit the books. The lawsuit was settled in September and alleged that the company provided misleading engagement numbers to investors. Twitter’s key subscriber metric, monetisable daily active users (mDAU) hit 211M in the quarter, up 13% from 12 months ago.

Future outlook

Going forward, the company plans to invest in new ad formats, including shopping formats and creator-focused revenue streams. “Our greatest opportunity and potential for growth is around personalisation and relevance,” CEO Jack Dorsey said on the call. “We intend to put a lot more emphasis here. This mainly speaks to our machine learning and general AI. But it also lends itself to the new products, services, and capabilities that we have been talking about.” Dorsey added that users won’t just see more relevant advertising, “but you’ll start seeing more relevant tweets also.” They finally added “we continue to expect total revenue to grow faster than expenses in 2021.

Technicals

The Twitter stock price is down 19.5% since October 20th and 32% down from all-time highs. $53 looks like an area of support for the price, which currently sits at $54.81. Below $49 and the stock would see more selling volume come in. A reclaim of $67 looks likely.

The weekly chart has dipped below a strong trend line after yesterdays drop. If the stock does not see buyers come in soon, this weekly action could add concern to investors.

Chart provided by TradingView

Final thoughts

Twitter needs to find some support and close this week out before it will be a buying opportunity. The outlook for the next quarter looks bright, but the price action may not follow. $53 and $49 are the areas to watch in the upcoming days and weeks. Demand could come in between these levels and the price could reverse to the upside.

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