Zinger Key Points
- Technical indicators suggest DJT stock may decline further, trading below key moving averages and showing bearish signals.
- Despite high valuation and political events, Trump Media's technical analysis points to potential downside risk for investors.
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Trump Media & Technology Group Corp DJT has had a wild ride, with the stock skyrocketing 190% over the past year and 110% year-to-date. However, recent technical indicators suggest caution, as the stock has dipped 26% in the past month.
Trump Media Stock Chart Giving Bear Signals
Despite the impressive long-term gains, DJT stock is currently exhibiting bearish signals.
Chart was created using Benzinga Pro
The stock is trading at $36.73, which is below its 5, 20, and 50-day exponential moving averages (EMAs), indicating selling pressure and potential for further decline. The stock is also trading below the 20-day simple moving average (SMA) at $39.05 and the 50-day SMA at $43.29, implying short-term bearishness.
However, the stock trades above the 8-day SMA, implying some bullishness.
Chart was created using Benzinga Pro
The Moving Average Convergence Divergence (MACD) indicator stands at -2.81, reinforcing a bearish outlook. The Relative Strength Index (RSI) is at 45.45, suggesting the stock is neither oversold nor overbought.
Bollinger Bands analysis also points to a bearish signal, with the 25-day range between $27.25 and $54.65, with the stock trading in the lower bearish band.
Related: EXCLUSIVE: Trump Vs. Biden Debate Unlikely To Sway 84% Of Voters: 1 Key Topic They Want Addressed
Trump Media Stock Valuation
Trump Media's valuation has soared to $6 billion, despite generating only $4.1 million in revenue in 2023, leading to a staggering price-to-sales ratio of over 1,400.
This valuation has drawn skepticism from industry experts, including LinkedIn co-founder Reid Hoffman, who suggests a more realistic valuation around $40 million.
Political Catalysts
The recent surge in DJT shares came ahead of the first 2024 presidential debate between President Joe Biden and former President Donald Trump. The debate, hosted by CNN, saw heightened tensions, with Trump using his platform, Truth Social, to criticize Biden.
Meanwhile, Trump is facing legal challenges stemming from his actions related to the 2020 election.
While Trump Media & Technology Group has enjoyed remarkable long-term gains, the current technical analysis signals caution. The stock is experiencing selling pressure, and bearish indicators suggest potential further decline.
Investors should weigh these technical signals against the backdrop of the company's high valuation and the political landscape as they make their decisions.
DJT Price Check: Shares of DJT were up 10.4% to $40.53 in premarket trading on Friday.
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Image created using artificial intelligence via Midjourney.
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