TWLO’s Neckline Test: Buy the Dip Near 104 for a Push Toward 111

TWLO ultra-detailed, step-by-step technical playbook and 24-hour outlook

1. Price action context (multi-week to near-term)

• April → early August: Multi-month advance to the 130s, then a sharp breakdown in early August. The decisive inflection was the gap-down from the low 120s into the low 100s on Aug 8, followed by a capitulation low on Aug 11 around 92.44. Since then, a reflexive rebound has developed with higher highs and higher lows on the daily swing, but price remains below key moving averages and massive overhead supply zones.
• Latest daily close (Aug 22): 106.38 (+5.4% vs prior close 100.97). High 106.68, Low 100.14. Strong bullish candle closing near the high, reclaiming the 105–106 shelf (prior neckline area). After-hours hourly prints ticked up to 106.94, indicating persistent demand into the close/weekend.

2. Key support/resistance map (levels derived from recent structure, gaps, and fibs)

• Immediate supports: 105.05 (Aug 18 close), 103.33 (Aug 19 close), 101.94 (Aug 20 close), 100.97 (Aug 21 close), psychological 100.00, 98.67 (Aug 8 close), 97.6–98 zone (lower S2 area).
• Immediate resistances: 106.68–106.94 (Aug 22 high and after-hours print; neckline supply), 108.6–109.0 (classic R1 pivot cluster), 110.9–111.6 (R2 and 50% retrace of the Aug drop), 115.8–117 (prior supply shelf and 61.8% retrace zone), 120–122 (major gap-down supply, likely heavy offers).
• Overhead gap: Aug 7 → Aug 8 left a very large gap from ~122.39 down to ~103.45 open on Aug 8. Price is now in the lower third of that gap range; expect dense supply between 110–122 as trapped longs look to exit.

3. Fibonacci frameworks (confluence check)

• Crash swing: High 130.66 (Aug 6) → Low 92.44 (Aug 11) • 38.2% = 106.45 (TWLO is essentially parked here now) • 50% = 111.55 • 61.8% = 116.66 Takeaway: Price is testing the first serious retracement (38.2%), so the next 24 hours often decide between rejection (pullback to 103–102) or extension to 111–112.
• Recovery leg: Low 92.44 → High 106.68 (Aug 22) • 23.6% = 103.60, 38.2% = 101.90, 50% = 99.56, 61.8% = 97.23 Takeaway: A buy-the-dip setup lives in 103.6–102.0 (first two retraces and pivot S1) with invalidation under 100.

4. Classic pivots for next session (derived from Aug 22 H/L/C)

• P = (H + L + C) / 3 = (106.68 + 100.14 + 106.38) / 3 ≈ 104.40
• R1 = 2P − L ≈ 108.66
• S1 = 2P − H ≈ 102.12
• R2 = P + (H − L) ≈ 110.94
• S2 = P − (H − L) ≈ 97.86 Takeaway: The intraday battle zone is centered on P ≈ 104.40. Bulls control above 106.7–108.7; bears control below 102.1.

5. Moving averages (trend filter and mean-reversion bias)

• 20-day SMA (approx): ~112.86 (average of the last 20 closes). TWLO closed well below the 20-D SMA, so the primary daily trend is still down; however, price is mean-reverting up from extreme deviation and approaching the mid-band area.
• 50-day SMA (qualitative): Likely in the high teens (~118–120) given June/July closes; price is decisively below it. Any rally into 115–120 should encounter strong resistance.
• Takeaway: Structural bearish trend remains intact, but near-term reversion higher is in progress; the 20-D SMA at ~112.9 is a magnet on further strength, contingent on clearing 108.7/111.0.

6. Momentum oscillators

• Daily RSI (14) approximate: ~36.8 (computed from the last 14 changes). This is lifting from oversold but still below neutral 50—consistent with a rebound within a broader downtrend. RSI has room to push to 45–50 on continuation.
• Stochastics (qualitative): Likely rising from sub-20 into mid-range; supports a continued short-term bounce but not yet “overbought.”
• MACD (qualitative): Negative but improving; histogram narrowing with potential bullish cross if price holds above ~104 and extends to ~109–111. This points to increasing upside momentum in the very near term.
• Takeaway: Momentum is inflecting bullish short term, but not yet confirming a full trend reversal.

7. Volatility and Bollinger Bands

• 20,2 Bollinger Bands (qualitative): After the Aug 8–11 shock, bands expanded sharply; price traveled below the lower band and has since reverted into the bands, now moving toward the mid-band (~20-D SMA ~112.9). Current close at 106.38 sits between lower band and mid-band. Typical behavior is a tag of the mid-band if the bounce persists—projecting an upside path toward ~111–113 before heavy resistance.
• Takeaway: Volatility contraction from extremes favors a continued mean-reversion grind higher unless rejected hard at 108.7–111.0.

8. Volume, OBV/accumulation, and supply-demand tells

• Volume spikes: Aug 8 (17.7M) capitulation; Aug 15 (10.1M) rebound thrust; Aug 18 (24.8M) very heavy churn near 105–108 (supply absorbing demand). Since then, volumes normalized but remain elevated vs early summer.
• Read: Capitulation followed by constructive accumulation is common in bottoming processes; however, the large distribution signature on Aug 18 near 107–108 highlights the importance of this resistance. A decisive push through 108.7 with follow-through and volume expansion would signal trapped supply beginning to thin out.

9. Ichimoku perspective (qualitative, daily)

• Price below Cloud; Cloud ahead likely bearish with Span A < Span B. Tenkan (conversion) likely rising toward price (approx 104–106), Kijun (base) likely higher (~117). A Tenkan cross above price is constructive short term; sustained closes above the Kijun/Cloud would be needed for a trend reversal (not yet present).
• Takeaway: Short-term improvement within a longer-term bearish regime. Expect resistance as price approaches the Kijun/Cloud zone (~115–118).

10. ADX/Trend strength (qualitative)

• ADX likely elevated from the crash with -DI still above +DI, but the crash leg has matured; a countertrend bounce often develops as ADX rolls over. A +DI cross over -DI on a push above ~108–111 would improve the bull case.

11. Pattern recognition

• Inverse Head & Shoulders potential: • Left shoulder ~98.7 (Aug 8 close), Head ~92.4 (Aug 11 low), Right shoulder ~101 (Aug 20–21 closes). • Neckline: 105.7–106.7 zone (Aug 15/22 highs). • Status: Break attempt underway; a clean daily close above ~107.3–108.0 would confirm. Measured move: Neckline (~106) minus head (~92) ≈ 14; target ≈ 120 (into the gap supply and under the 50-D SMA). For the next 24 hours, the important milestone is to hold above 105 and probe 108.7/111.0.
• Gap play: Price entered the lower portion of the Aug 8 gap. Typical behavior is partial fill to 38.2–50% of the drop (106.4–111.6) before reassessment. We are at 38.2% now.

12. Market profile and microstructure (qualitative)

• High-volume node around 103–106 (Aug 15–22 activity). Expect responsive buyers on dips into 103–104. Heavy supply is anticipated 108–112 (prior churn and fib/pivot confluence). First acceptance above 109 would likely open a path to 111–113.

13. Hourly/after-hours read (last prints provided)

• 22:00 UTC: 106.69; 23:00 UTC: 106.94. After-hours firmness near the session highs suggests buyers were active into the weekend, increasing the odds of a slight Monday gap-up or early-session push into 107.5–109.0 before testing the dip-bid.

14. Classic scenarios for the next 24 trading hours (probabilistic)

• Base case (55%): Early push into 107.5–109.0 (R1 test), brief rejection, then a dip toward 104–105 (pivot zone) that attracts buyers. Session finishes between 106–109, keeping the breakout attempt alive. Key tells: Holding above 105 on pullbacks and seeing volume build on upswings.
• Bearish fade (25%): Immediate rejection at 106.7–108.7, quick slide to S1 102.1. If 102 fails, a momentum flush to 100–98 (S2) is possible. This would negate the iH&S breakout attempt short term.
• Bull extension (20%): Clean expansion through 108.7 with momentum, continuation to 110.9 (R2) and possibly a brief pin near 111.5 (50% fib) before consolidating 109–112. Would strengthen the case for a 112.9 (20-D SMA) tag in subsequent sessions.

15. Strategy synthesis and trade design

• Tactical bias: Buy-the-dip within an emerging short-term up-leg, with the recognition that the broader daily trend remains down. Risk must be controlled below 100.
• Why Buy (not Sell) here: • Price reclaimed and is attempting to break a neckline at ~106–107 with after-hours follow-through. • We sit right at the 38.2% retrace of the crash leg; momentum and breadth often carry price to the 50% retrace (≈111.5) before larger sellers re-assert. • Multiple supports cluster at 105 → 103 → 102; clear invalidation below 100 provides defined risk.
• Optimal execution plan: • Entry: Staggered limit buy centered near the pivot zone 104.4 with tolerance down to 103.6 (23.6% retrace of 92.4→106.7 and above S1 102.1). This aims to capture a standard pullback after an opening push. • Take-profit (24h target): 110.9 (R2) as the primary objective; it aligns with pivot math and sits just below the 50% retrace (111.55), a natural stalling area. • Protective stop (not part of the required fields, but essential): 99.9 (beneath psych 100 and 50% retrace of the rebound leg at 99.56), giving the trade room while invalidating the iH&S breakout if breached. • Reward/Risk: Entry ~104.2 to TP 110.9 = +6.7; risk to 99.9 = −4.3; R:R ≈ 1.55:1 (improves to >2:1 if partials taken from 108.7 to 111.0).

16. What would invalidate the long idea in the next 24h?

• Swift failure back below 102.1 (S1) with heavy volume, no responsive bid at 101.9–100.0, and a daily close <100. That would re-open the path to 98 → 95 and signal the bounce has failed.

17. Bottom line call and 24-hour path

• Probability-weighted expectation: A test of 107.5–109.0 early, then a dip buy opportunity around 104–105, followed by stabilization and a push toward 109–111. With price perched on the 38.2% retrace and momentum improving, upside probes are slightly favored over immediate rejection. The optimal plan is to Buy (long) on a controlled pullback with a target into 110.9.

Actionable numbers

• Decision: Buy (Long position)
• Open (limit): 104.20
• Close (take profit): 110.90
• Reference levels: P=104.40, S1=102.12, R1=108.66, R2=110.94; Fib 38.2%=106.45, 50%=111.55.

Note: Markets are closed on weekends; the next 24-hour window effectively refers to the next trading session plus pre/post market. Liquidity in pre/post can be thinner; use limits and respect slippage.