Digital Ally at Critical Price Level

Shares of Digital Ally

are pulling back sharply today, retracing all of Friday's gains, as a general retreat in momentum stocks and profit taking are pushing the shares towards the critical 16 support level. Friday's price action formed a bearish Doji candlestick pattern, which saw DGLY open higher at 17.88, trade as high as 20.20, then close near the lows of the day at 17.63. Usually this formation signals a reversal in the stock price, which is evident in DGLY today. Fundamentally, shares spiked higher on Friday following news of an $200,000 order from US military police for surveillance equipment, although by day's end the relatively small order size weighed on the shares. 16 was the breakout level for the stock in late August, and was also a support area on three separate occasions last week. So far the shares have held this level, with next support around 14.50 from a technical perspective. Shares of DGLY are trading at 16.33, down 7.37 percent on the day.