Despite an 80% reduction in share price over the last year, Twilio stock (NYSE:TWLO) may be a diamond in the rough. True, it fell to a new 2-year bottom last week, but there are clues, both fundamental and technical, that a Q4 rebound might be on the way.

Read on if you like a good recovery tale and don’t mind a little danger.

Twilio Stock: Positive Reactions

Piper Sandler restated their Overweight recommendation on Twilio stock (NYSE:TWLO) just over two weeks ago, with a new price objective of $113. Analyst James Fish believes that given the current economic climate, some of their clients may be intending to slash marketing spending. Still, the company’s recent reorganization and concentration will help it in the long run. When reaffirming his team’s viewpoint, he understood the possible short-term harm but emphasized the long-term possibilities.

Since shares have only slid deeper in the last two weeks, the potential upside has become juicier. We’re now looking at a 65% rise for shares to accomplish that, and the 8% spike witnessed in yesterday’s session indicates what they could be capable of.

Behind the underlying forces, a bullish technical setup is beginning to form. Given that it was constructed after a multi-month decline, some risk is involved, but this seems to be one of those occasions where the return outweighs the risk. The recent lows in shares are precisely around the $70 level that they rebounded off during the worst of the COVID sell-off in March 2020. It’s also where the bears ran out of steam during the October 2018 downturn. If the surviving bulls make the symbolic final stand, there are few better locations to do it than right here.

Twilio Stock: How to Get Involved

If Twilio stock (NYSE:TWLO) can leverage yesterday’s surge to firmly leave the $60-70 zone behind, there’s a compelling case for them to return to the high $80s, where they spent most of the summer consolidating. The last two months have been difficult for practically every market stock, creating unusual purchasing chances for those of us on the sidelines. As with many of the equities we’re writing about these days, you have to consider that the worst-case scenario is built into the share price.

If our readers are tempted to get in, there are several simple areas to halt losses for a fast exit if the rally fails to develop momentum, while to the upside, there’s plenty of space to go until shares begin to fatigue. The stock’s RSI is still only in the 40s, indicating that it is still recovering from very oversold levels, while the MACD is poised to turn positive. Let’s see whether the wider market attitude improves over the weekend and if it rekindles Twilio’s fire.

Featured Image-  Megapixl @ Designer491

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