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Money Flow Shifts: Chevron Corporation Vs. Twitter Inc

|Includes:CVX, Twitter, Inc. (TWTR)

Chevron Corporation (NYSE:CVX) missed earnings and revenue numbers just weeks ago yet the stock is trading near 52 week highs. Twitter Inc (NYSE:TWTR) growth numbers came in light and this stock is off its all-time highs by over 60%. What is going on? Why such different reactions? This price action is a great example about how market sentiment leads money flow and is far more important than actual fundamentals. Twitter Inc and Chevron Corporation are great examples of how the money flow over the last few months has gone from high tech, high beta names into safe, dividend paying names.

While this price action has been going on for well over a quarter, there are signs lately that this money flow may be starting to reverse. If that is the case, there may be some great opportunities to be long technology stocks like Twitter Inc as well as short names like Chevron Corporation. Twitter Inc is trading at 33.48 +1.43 (4.46%) while Chevron Corporation is trading at 124.91 -0.12 (-0.10%). Please note how the beaten down stock Twitter is getting a bounce while Chevron is flat to lower on a strong day in the markets.

This is the clearest sign we have seen in months that money flow is starting to reverse course. Investors are willing to take on risk again and are dumping slow, safe stocks like Chevron Corporation. Twitter Inc and other beaten down plays are likely going to see more upside in the coming days as long as no big negatives hit the market.

Gareth Soloway

Stocks: TWTR, CVX