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Twitter Inc. bulls can stand tall once again, because they are officially back in control of the stock for the first time in seven months.
The stock TWTR, +6.43% surged 6.4% on Monday, as investors cheered Chief Executive Jack Dorsey’s share purchases and the company’s partnership with Bloomberg to create a 24/7 streaming television service. Volume spiked to 47 million shares, or nearly triple the full-day average of 16.1 million shares.
The shares have run up 19.6% since the social-media company reported better-than-expected first-quarter results last week. Since April 7, when it closed at a 10-month low of $14.29, the stock has now soared 22.7%.
Many on Wall Street define a bull market has a rise of 20% or more on a closing basis from a significant low, as long as that low followed a bear-market decline of 20% or more from a previous peak. The new bull market became official with Monday’s close above $17.15.
The rally comes while many on Wall Street remain skeptical of Twitter’s ability to profit from the use of its free service. The average rating of the 38 analysts surveyed by FactSet is the equivalent of hold, and short interest in the stock, which are bets that share prices will fall, have reached an 11-month high.
Twitter’s stock inched past the closely-watched 200-day moving average, which extended Monday to $17.53. Many chart watchers view the 200-day moving average as a dividing line between longer-term uptrends and downtrends.
The stock rose to an intraday high of $17.65 before paring some gains to close at $17.54. That’s the first close above the 200-day MA since Feb. 8.
Twitter’s bull-market peak of $24.87 was reached on Oct. 5, as reports swirled that the company was evaluating buyout bids, from companies such as Alphabet Inc.’s GOOGL, +0.90% Google. The current bear market started a day later, when the stock plunged over 20% following reports that Google was no longer interested in Twitter.
Since then, there were a number of short-term rallies, but the biggest topped out at 17.5% from the Oct. 17 close of $16.73 to the Dec. 9 close of $19.65.
The previous bull market started on June 23, 2016, when the stock ended 21.6% above the May 3, 2016, record closing low of $14.01. That bull market lasted about 3 1/2 months until Oct. 5, and added a total of 77.5% to the stock’s price before it ended.