You Ask, We Analyze: Why Vinco Ventures Could Make A Reversal If Stock Holds This Key Level

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.

@canojohnno, @yoloapes, @AndreasErnesto, @Royal_brx, @darshanp570, @Aaron_529, @Wisar21459468, @FpsSultan, @In_GENIO_Mex, @JosephH97029372 and @ParabolicWeiner are buying Vinco Ventures, Inc BBIG.

Between Aug. 27 and Sept. 8, 2021, Vinco Ventures soared about 272% before entering into a steep downtrend that brought it from the Sept. 8 all-time high of $12.49 to a low of $2.18 on Thursday. The meteoric rise was due to a short squeeze, something the year 2021 became known for in the stock market with retail traders joining the trading and investing world en masse during the stay-at-home orders that have plagued the globe, throughout much of the past two years.

A stock becomes a good short squeeze candidate when a number of underlying statistics align, and not much has changed for Vinco Ventures over the past few months, which means another short squeeze could be in the cards for 2022.

Some of the statistics to consider when evaluating a stock on whether a short squeeze is possible is looking at the short interest, the total amount of shares available for trading (float) and the amount of institutional and insider ownership.

Vinco Ventures ranks high within these three categories because the stock has a relatively small float of 123.38 million shares with insiders and institutions holding 28.81%. The stock also has a high percentage of its float held short, measuring in at 30.38 million, which is up from 28.58 million in November.

Perhaps more importantly, Vinco Ventures hit a key support level on Thursday and bounced, which may indicate the bottom is in, especially because a number of other bullish signals have become clear on the stock’s chart.

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The Vinco Ventures Chart: Vinco Ventures hasn't traded below a key support level at $2.16 since April and hasn't traded consistently below it since January 2021. On Thursday, when Vinco Ventures tested the level as support and bounced, the stock printed a hammer candlestick on the daily chart, which indicates higher prices may come on Friday.

Vinco Ventures has three gaps above on its chart, with the closest gap between $$3.56 and $3.77, a second gap between $5.56 and $5.86 and the highest gap between the $9.45 to $9.51 range. Gaps on charts fill about 90% of the time so it is likely Vinco Ventures will trade up into the ranges at some point in the future.

The stock’s relative strength index (RSI) has been hovering near the 34% level since Dec. 27. When a stock’s RSI nears or reaches the 30% level it becomes oversold, which can be a buy signal for technical traders although it should be noted RSI, and other indicators, can stay extended for long periods of time.

Both bulls and bears need volume to come into Vinco Ventures. The average daily trading volume in the stock has been mostly average or below-average since October. When a stock has lower-than-average volume it indicates a lack of interest.

Vinco Ventures has resistance above at $2.63 and $3.06 and support below at $2.16 and $1.55.