 Welcome traders to another Ticknail Earnings Report Preview with me, Patrick Munley. Before we jump into today's report, as always, we want to adhere to the risk disclaimer. Most pertinent to today's presentation is the fact that the views expressed by me are solely mine. They're not indicative or representative of those held by Ticknail, UK or Ticknail, Europe. Limitations. Okay, let's jump into today's report and we are looking at Twitter. Twitter who are set to announce earnings before the market opens on Friday. Looking for an earnings per share of $0.14 on revenue of $1.324 billion. So Twitter will be looking to steady the ship as Elon Musk tries to walk away from his $44 billion takeover of the social media platform. The first thing they'll be looking to do is to reaffirm their belief that Musk will be forced to follow through the takeover at the original $54.20 per share price tag and communicating its legal argument as it prepares for a showdown in a court against the billionaire. The second thing they'll be looking to do is demonstrate the platform is growing and engaging its user base and that Twitter has solid prospects regardless of what happens with the takeover bit. Musk launched the $44 billion takeover for Twitter in April at that $54.20 per share but put it on hold in May before announcing he's walking away from the deal after alleging Twitter broke the terms of their agreement. Musk believes he has the right to walk away penalty free while Twitter is arguing that Musk claims are without merit and that he must complete the takeover at the original price tag and set the stage for this major legal showdown. Twitter will be looking to show that business is still in good shape by delivering growth in both engagement and user numbers while demonstrating its prospects are still solid and fears that an economic downturn could result in a pullback in advertising spending. Analysts believe Twitter will have ended the second quarter with 237.5 million average monetizable daily active users compared to 229 million at the end of the first quarter. Users will be closely watched considering Musk's main argument for trying to walk away from that takeover centres on accusations that there are far more fake accounts on the platform than Twitter claims. Revenue is forecast to rise thanks to greater ad engagements twinned with a limited lifting crisis making the platform attractive to advertisers but earnings will come under pressure as costs and investment levels rise at a faster pace unless forecast total costs and expenses will come in around 60% higher from the last year during the second quarter. Twitter has already slowed the pace of hiring and cut some waste in response which investors hope can at least partly offset rising costs and slower top line growth. Twitter is highly unlikely to provide any forward guidance for the third quarter or for the rest of the year because as far as the company is concerned it's about to be purchased by Musk. Twitter had a goal of ending 2023 with 315 million users but withdrew this once the takeover offer was made. This is still likely to be treated as a target considering the takeover is in doubt now. Markets still have doubts over that amid slower growth believing it can end 2022 with 253.7 million users and grow back to 289.2 million by the end of 2023. Okay let's jump in and have a look at some of the statistical trading patterns around Twitter earnings release. Twitter shares have moved higher in the immediate aftermath of earnings 6 out of the 12 previous reports. On average the stock moved down negative 2.7% in the first day of trading after the company's earnings reports. Based on the previous 12 earnings releases Twitter is more likely to trade lower one day after earnings for an average loss of 2%. On average the stock has moved lower by 0.4% one week after earnings. Let's see what the options market is pricing in terms of volatility. Options traders are pricing in a 4.5% move on earnings and the stock has averaged 10.2% in recent quarters. From a flow and sentiment perspective there has been notable buying 11,315 contracts of the $40 call expiring this Friday. Options order flow in general though is bearish. Investor sentiment going into the company's earnings only has 10% expected at earnings beats. Twitter share price has drifted down and 19.4% posts its prior earnings announcement. Using the last 12 quarters of the day the average drift between earnings announcements is 8.1%. So let's jump into the charts and see if we can identify any potential trading opportunities that may be developing. If we look at the weekly chart here we have a clear five wave sequence developing and if this wave 4 high is that post takeover bid part there into the 5460s that will give us a downside objective of a 5 equals 1 at $23.46. Now if this is our fifth wave it looks to be subdividing quite nicely into five waves as well. So what I've been looking for here on the daily timeframe is any move up into this trend line resistance 4340s to 44 area watch for bearish reversal patterns there to engage on the short side targeting a move down to that minimum downside objective of 2528 which is the 127 extension of our current wave 4 structure and then that 2346 which is the 5 equals 1 downside objective. So as you can see we've really taken close back through the $44 level to suggest that we may have a more meaningful level in place and then we'd be looking for a test up into range resistance currently at 5450s. As always trade the plan the trade the plan the most importantly manage your risk. Until next time, thanks very much.