You Ask, We Analyze: Why Vinco Ventures Stock Looks Ready For A Reversal

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.

@Royal_brx, @IamMrRic and @jotorres1 are buying Vinco Ventures, Inc BBIG.

Vinco Ventures, which will soon be known as Zash, is a ‘disruptor’ in the media and entertainment industry and recently acquired Lomotif -- a video-sharing social networking platform with competitors that include TikTok and Kuaishou.

Retail traders like the stock for both its potential and its underlying statistics. Vinco also has all the characters that make it a great short squeeze candidate:

• Small Float: Vinco has a fairly small float of 93.38 million shares.
• High Ownership Levels: 18.65% of Vinco’s shares are locked up with insiders and institutions. While the institutional ownership, at 8.62% is relatively average 10.05% of the total available shares are held by insiders, which indicates the people within the company have a high level of belief in Vinco’s success.
• High Short Interest: Of Vinco’s 93.38 million shares, 25.11 million, meaning 24.87%, are held short. The number has increased from 21.34 million in September.

See Also: EXCLUSIVE: ZASH Global Media Co-Founder Explains Miscommunication Involving Vinco Ventures Management Transition

The Vinco Chart: Vinco has been in a free fall since Oct. 19 when the stock broke down bearishly from a potential bull flag on the daily chart. Vinco is currently trading about 46% below the Oct. 15 high of $9.06 but on Friday the stock opened slightly higher and looked to be ready to reverse course.

Vinco Ventures created a bullish double bottom pattern on Wednesday and Thursday near the $4.57 level. If the pattern is recognized, Vinco is likely to bounce up and trade in an uptrend over the coming days. The stock will need to climb up over the $5.56 area to signal a trend change is in the works.

The stock has a gap above on its chart between $5.56 and 5.86 that was left behind on Oct. 22. Gaps fill about 90% of the time so it is likely Vinco will trade back up into the range in the future. There is also a tiny 10-cent wide gap between $9.41 and $9.51.

Vinco is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

• Bulls want to see big bullish volume come in and drive Vinco up to make a higher high and fill the first gap above. The stock has resistance above at $6.08 and $7.40.
• Bears want to see big bearish volume come in and drop the stock down below the double bottom low of $4.57, which would confirm the downtrend. Below the level, Vinco has support at $4.06 and $3.06.