The last time I took a look at this company was back in August of 2020, nearly 1.5 years ago. (this article can be viewed here). Before I get into the charts, lets take a look at what Twilio does:
“Twilio is in the cloud communications business and has had an extremely impressive rally since March 2020 low. It is a a cloud communications platform as a service company based in San Francisco, California. Twilio allows software developers to programmatically make and receive phone calls, send and receive text messages, and perform other communication functions using its web service APIs.”
Here’s that chart I presented way back in August 2020:
Twilio 4H Elliottwave August 2020 view:
Back then, the chart was supporting the idea that a nest was taking place in black ((2)). The stock did enter into the blue box and reacted higher, you can see this reaction in the chart below, now labeled ((4)) instead of ((2)).
It provided a good opportunity for a trade higher. However, the pullback that is currently underway has gone too deep, and it is now favoured this stock is correcting the whole cycle from the IPO. Lets fast forward to present day and see what the chart is speaking.
Twilio Elliottwave Jan 2022 view:
Medium term term view from Feb 2021 peak set @ 457.30 . The pullback since the peak nearly a year ago, has been very choppy. The the ((W)) and ((X)) has played out as an expanded flat connector. This is clearly seen with the (C) leg rallying in 5 waves off the (B) low, which is the tell tale sign of an expanded flat.
There is now another blue box presenting itself from 230.36 to 117.74. I do believe that there is further downside potential still. At the present time, the $SPY is looking for more downside and this can weigh TWLO until the indices strike a low. I have set out the retracements from the entire rally from all time low to all time high on the right side. The 61.8 retrace is approaching at the 189.86 area, this may be the price where algos are able to produce a bounce in 3 waves at least.
Using proper risk management is absolutely essential when trading or investing in a volatile stocks. Elliott Wave counts can evolve quickly, be sure to have your stops in and define your risk when trading.
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