Trump Media & Technology Group Corp DJT, the company behind Truth Social, saw its stock climb 10.5% on Wednesday.
The stock clawed back some ground after Monday's sharp sell-off triggered by the expiration of a lockup period that allowed key insiders, including Donald Trump, to offload shares.
Investor relief came as Trump, who rejected a second debate with Vice President Kamala Harris, reassured investors earlier in September that he has “no intention of selling” his stake.
Trump Maintains His Stake After Lock-Up Expiration
Trump Media's stock has been as volatile as the political news cycle surrounding its namesake. The expiration of insider selling restrictions caused a sharp plunge, but retail investors have jumped back in, hopeful that Trump’s decision to reject the debate and maintain his stake could signal long-term confidence.
However, between mid-July and this week, the stock lost 70%, especially after Harris replaced President Joe Biden as the Democratic presidential nominee.
Bearish Technicals Signal Tough Times Ahead
Despite Wednesday's rally, technical indicators paint a cautious picture.
Chart created using Benzinga Pro
Trump Media's stock price of $14.13 sits far below key moving averages:
- Eight-day SMA: $14.15 (Bearish signal)
- 20-day SMA: $16.34 (Bearish signal)
- 50-day SMA: $22.64 (Bearish signal)
- 200-day SMA: $33.90 (Bearish signal)
With DJT stock trading below all key moving averages, the stock’s current momentum and trend are strongly bearish.
Chart created using Benzinga Pro
The Moving Average Convergence/Divergence (MACD), too, remains deeply negative at -2.72, and the Relative Strength Index (RSI), at 34.90, signals near-oversold conditions, suggesting the potential for further declines.
Bollinger Bands suggest the stock is stuck in a tight range between $11.61 and $24.01, reflecting continued volatility. It has been trading in the lower bearish band, firming up the bear case for DJT stock.
Read Also: Trump’s Stake In Media Group Raises Ethics Concerns Ahead Of 2024 Election: Report
Retail Investors Banking On Trump's Political Power
Retail traders seem to be tying the stock's fortunes to Trump's political prospects, betting that his 2024 campaign can provide a tailwind for the stock.
However, the fundamentals are worrying: Trump Media trades at an extraordinary 625 times revenue, vastly overvalued compared to its meager $837,000 quarterly earnings.
Can Retail Hype Outrun Bearish Momentum?
Trump Media's 10.5% bounce may provide short-term optimism, but technical signals remain bearish.
Whether the company can continue this rebound or succumb to further selling pressure depends on its financial performance and the unpredictable political landscape.
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