Trump-sensitive stock Digital World Acquisition Corp. popped up 4 percent higher shortly after the markets opened on Thursday.
The SPAC, which merged with Trump Media and Technology Group public in October plans to launch its social media app, Truth Social, on Feb. 21. The app will have similar features to Twitter Inc. but posts will be referred to as “truths” as opposed to “tweets.”
The Digital World Chart
On Wednesday, Digital World broke up through a key resistance level at $66.31 that had been holding the stock down since Oct. 29. Digital World then printed a bullish Marubozu candlestick on the daily chart, which indicated higher prices were likely to come on Thursday.On Jan. 6, Digital World hit a low of $45.20 where it ran into a group of buyers, which caused the stock to wick from the level and shoot up to create a high of $61.85. On Jan. 10, Digital world then printed a higher low at $51.07, which set the stock into a new uptrend.
If Digital World closes the trading session near its opening price, it will print a doji candlestick, which may indicate the stock will trade lower on Friday to print it’s next higher low. The pullbacks to print higher lows are both healthy and bullish as well as giving traders who aren’t already in a position a solid entry point to go long.
Digital World’s relative strength index (RSI) is running high at about 70 percent, which also indicates a retracement may be needed to cool the indicator. When a stock’s RSI reaches or exceeds the 70 percent level, it becomes overbought, which can be a sell signal for technical traders.
- Bulls want to see sustained big bullish volume come in after a period of consolidation and push up over the last real form of any resistance at $74. Digital World may then find some resistance at the 0.382 Fibonnaci level just above $90 but there is no real resistance in the form of price history above until the all-time high of $175.
- Bears want to see big bearish volume come in and drop the stock down back down below the key support and resistance level at $66.31. Below the area there is support at $59 and $53.98.
