Trump Media & Technology’s technical picture is showing weakness following a recent merger jump, causing concern for shareholders. To prevent further losses, the stock needs to show strength soon, ideally by Friday. The stock movement from the beginning of 2021 has been volatile, with a run-up when Trump Media was announced as the merger target followed by a decline below the $50 barrier after the completion of the merger. Trading volume has fluctuated throughout these periods, indicating potential for further declines unless a fundamental growth driver emerges.
Candlestick charts show that Trump Media’s stock opened above the $50 barrier last week but failed to maintain an uptrend, stagnating and closing lower each day. This weakness continued into the current week, with Monday confirming the previous week’s decline and Thursday raising concerns for a significant downtrend ahead. Friday’s performance will be crucial, as a rise above $50 on higher volume could ease shareholder worries and deter short sellers. However, if the stock fails to rise or declines further, there may be a significant downside risk.
Despite the technical indicators showing weakness, Trump Media’s fundamentals also raise concerns, with low sales and negative earnings. While potential growth and success may be on the horizon, the current reality does not support the high stock price. Investment analysts will need to evaluate Trump Media based on reasonable assumptions to determine its true valuation. The company’s transparency regarding its strategies, operations, and finances will be crucial in this analysis, although results may not come soon enough to prevent potential downward trends in the stock.
In conclusion, Trump Media is transitioning from a speculative stock to one with new cash but high valuation relative to its fundamentals. Without significant future potential to support its stock price, holding onto Trump Media shares without a rise above $50 on Friday may pose a risk for investors. As such, exploring alternative investment opportunities may be a prudent move for shareholders looking to mitigate potential losses. The stock’s performance in the coming days will be key in determining its trajectory in the market.
