You Ask, We Analyze: Vinco Ventures Stock Looks Ready To Make A Break

On Sunday evening, Benzinga asked its followers on Twitter what stock they plan to buy at the open on Monday. From the replies, Benzinga selected one ticker for technical analysis. @adventuresang87, @BossaJimmy and @whatsnextmckay are buying Vinco Ventures, Inc BBIG.

Vinco Ventures, a brand acquisition and digital media company, has been a popular stock amongst retail traders since the beginning of the year. On Jan. 21, a few days prior to the Jan. 27 epic GameStop Corporation GME short squeeze Vinco Ventures gapped up and ran 514% over the Jan. 20 closing price.

Shorts of Vinco Ventures have been squeezed a number of times since with the most recent squeeze, between Aug. 24 and Sept. 8 cause the stock to skyrocket 400%.

Vinco Ventures still has all the characteristics that make it a good short squeeze candidate:

• Relatively Small Float: Vinco Ventures has a total float of 93.68 million.
• High Short Interest: Shorts have been piling into Vinco Ventures and currently 21.34 million shares, meaning 23.40%, are held short. This number has increased massively from 11.67 million in August.

See Also: 15 Stocks Moving in Monday’s Pre-Market Session

The Vinco Ventures Chart: Since reaching its Sept. 8 52-week high of $12.49 Vinco Ventures has entered into a steep downtrend, declining over 60% to an Oct. 6 low of $4.77. When Vinco Ventures reached the low it printed a doji candlestick on the daily chart, which indicated the trend may reverse.

On Oct. 7, Vinco Ventures attempted a reversal to the upside but was unable to reach over the Sept. 30 lower high at $6.68 and on Friday traded lower. Monday’s price action will be important to determine the possible direction for Vinco Ventures’ stock.

Traders can watch for the following possible scenarios to play out:

• Continued Downtrend: If the stock falls below $4.77 the downtrend remains intact.
• Reversal Signal: Vinco Ventures could print a bullish double bottom pattern. Traders can watch for a reversal candlestick at the level and then for big bullish volume to come in and drive the stock up to confirm the pattern was recognized.
• Consolidation: If Vinco Ventures is unable to break above the most recent lower high at $6 but fails to make a new lower low, the stock may trade sideways in consolidation for a period of time before deciding a direction.
• Reverse Trend: If big bullish volume comes in and drives Vinco Ventures up above the $6 mark, it will be the first indication the downtrend is over. A move above the level would also allow the stock to regain support of the eight-day exponential moving average (EMA), which would give bulls more confidence.