Twitter is nearing a turning point, says one top strategist.
Shares of the social media company hit lows not seen since 2020 on Thursday, extending a decline that began in late October and accelerated after Monday's announcement that Chief Technology Officer Parag Agrawal would succeed Jack Dorsey as CEO.
Ark Invest's Cathie Wood confirmed her firm bought 1.1 million shares of Twitter after the leadership change, telling CNBC PRO on Wednesday that she liked Agrawal's vision for the company and Twitter's verification power as it relates to the NFT craze.
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Now, the stock is close to a potentially pivotal juncture, Fundstrat Global Advisors' global head of technical strategy, Mark Newton, told CNBC's "Trading Nation" on Wednesday.
"We're starting to see signs that this could be bottoming out over the next couple weeks," Newton said. "It's dropped almost 50% now from the mid-February peak and often times, technically, that's a very important sign if you see an absolute 50% retracement."
The stock is also significantly oversold and closing in on former highs from 2018 and 2019, "a very key level of support" around the $42 level, Newton said.
"The risk-reward for me is increasingly getting very, very good," he said. "I think the stock bottoms out in the next couple weeks. It should start a slow rise up to the low- to mid-50s."
Twitter shares fell nearly 2% in early Thursday trading to just above $42.
The 3.78 billion social media users around the world should continue to drive the whole space higher, Rockefeller Capital Management's Michael Bapis said in the same interview.
"Innovation is off the charts in this sector. The competition is really heating up," said Bapis, who is managing director of Vios Advisors.
"Because advertising dollars will add to revenue streams, these companies can continue to make money while innovating and becoming something in the future. So I just think the whole technology space, which social media is a huge part of, is going to continue to grow, it's going to continue to be in our world and we as human beings are more dependent on it than we ever have been."