Why TWLO May Be in Big Trouble

TWLO left bearish Train Tracks in early September.

They left a 2nd set late last month in tandem with a Gilligan sell signal (a gap up to a new 60 day high with a close at/near session lows) and a Soup Nazi sell (a new 20 day high that knifes back below the prior swing high within a 20 day lookback).

These are in addition to TWLO’s break of a 2-month rising trendline on Tuesday.

Multiple signals/patterns underscore the odds of a significant turning point.

When the technical picture dovetails with the Square of 9, a powerful message is on the table.

Notably, the 2nd set of bearish Train Tracks saw the 2nd mouse get the cheese.

In the case of TWLO September 4th and 88 square-out as seen in the Sq of 9 below.

360 degrees down is 55 which ties to the last major swing low in late July.

In other words, not only was TWLO up a full rev of 360 degrees at its recent breakout attempt, but there a time/price square-out was also in the wheelhouse (September 4 and 88).
TWLO sets up as a sell on a backtest toward the broken trendline around 83.

False breakouts can be the most dangerous position for a stock, especially a Late Stage Breakout following a sustained run.

This is the case for two reasons:

1) Those who bought the breakout and or those that have been long the stock may turn tail quickly if it reverses with authority.

2) Often, a stock is bought to breakout in order to sell into… a Buy ‘Em to Bang ‘Em strategy.

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