You Ask, We Analyze: What The Covfefe Is Going On With Digital World's Stock?

On Thursday evening, Benzinga asked its followers on Twitter what they’re buying at the open on Friday. From the replies Benzinga selected one ticker for technical analysis.

@real_bullish, @Michael77402703, @realbobbykid, @bgbuilder84, @greedspy, @GmenJoe, @WinerToBeToo, @ukalumni9370, @simala27, @stocklife0326, @davescottreal, @iamaydins, @TheMaverick_Man and @540856 are buying Digital World Acquisition Corp DWAC.

@YB_Anthony was curious to know whether the stock would be worth his time. @tmoney5151 responded to say “of course it is... it’ll hit $100 by noon.”

@tmoney5151 underestimated the power of the stock, however, which opened Friday’s trading session at $118.80 and soared up over the $150 mark within the first 30 minutes of the market opening.

Digital World became popular on Thursday after it was announced the SPAC would merge with Trump Media & Technology Group, which plans to launch a new social network called TRUTH Social. Any traders not already in a position of Digital World should have tight stops set because what goes up almost always comes back down, and often quickly.

See Also: 7 Key Takeaways From The Donald Trump SPAC Deal

The Digital World Chart: Digital World closed up about 358% higher on Thursday and on Friday gapped up another 161%. The massive bullish kicker candlestick on Thursday indicated the stock would trade higher on Friday, but the bull run on Digital World defies gravity.

Digital World reached an all-time high of $175 at 10:00 a.m. ET, where it ran into sellers and profit takers. The stock was able to run so yugely because every trader and investor with a position as of Thursday was in profit, and FOMO buyers jumped in and caused World Digital to skyrocket. For every seller there is always a buyer, however, and there are now traders in the red who bought at and near the high-of-day.

The stock is likely to come down further over the coming trading days because the relative strength index is measuring in at a very uncomfortable 95%. When a stock's RSI reaches or exceeds 70% it becomes overbought, which is a sell signal for technical traders.

If Digital World closes Friday’s session below the $140 mark, it will print a bearish shooting star candlestick. The candlestick, paired with the bigly gap below likely means the stock will trade lower in the future, because gaps on charts fill 90% of the time.

Traders choosing to hold their positions in Digital World can use the eight-day exponential moving average on the five-minute or 15-minute chart as a guideline. If the stock falls below the eight-day EMA on smaller timeframes it is a warning sign it could drop further. Although Digital World is trading above all the moving averages on the daily chart, they can’t be used for analysis due to how extended the stock is.

There are no solid support or resistance areas nearby to where Digital World is trading to use as a guideline.

Donald Trump. Photo by Emily Elconin.