Another look at Digital World Acquisition ($DWAC)…and my price target. – January 14, 2022DWAC
I really like the way Digital World ( NASDAQ: DWAC ) is trading here, right in this area here. I know I have featured this, you guys should be all over this because I have already talked about this in a Fitz In Five, a Chart of the Day video. Some of our members were on this a heck of a lot earlier than I was, and big. Here’s what I am saying, as I have mentioned before, this is kind of, technically in a volatility squeeze, even though the bands were pretty tight just relative to the way the whole stock has been trading, this was a pretty tight squeeze.
The first idea that you got that this trade was real was right here, forget about this, I’m talking about the volume. Low volume, pull back, you could literally craft a trade just based on the volume characteristics if we just did it this way. Green and red, green good, red bad, green up, red down. You would go, okay, wow. A nice big buying spurt here when the stock went up. Okay, then the stock came down but it was on less volume, still high but less volume, so man, this was a big day.
And then the following day, the volume bar comes back up, and guess what? It’s green, and you go, oh my gosh, twin skyscrapers here. We’ve got a green one and then a little red one, and then another green one up here. So a couple of big skyscrapers here with a little red one stuck in between, something good is going on. And then the next day you are going, holy crap! This thing had been trading way down here in volume, maybe a couple of million shares a day, I don’t know, down there. But it had been trading at real low volume and suddenly things have got really, really sporty here.
So what the heck is going on with the volume? We got another big day here and you are looking at this going, okay, crap, 3 out of 4 days, and this was a massive volume day. I don’t know what the price was doing, yet, but with this kind of volume that had to be one hell of a move. And then the following day, OMG, even more volume, probably, I don’t know, 17 million or something. I thought this was really big back here at 11 million. And where were we back here? So, man, there is, mark this word, institutional, this is institutional buying. Buying a 67, $70.00 a share stock at 15, 16, 17 million, Billy Bob and Jethro don’t do that. This is like Goldman Sachs and whatever criminal enterprise is doing this now. You’ve got these massive volume spikes, 4 out of 5 times. A big volume spike here, huh, I wonder what that is all about?
It seems to me, we’ve got this low volume here, we’ve got these big massive volume spikes here so the stock had to be going up. This was a pretty big volume spike too, this was the highest volume spike other than these 2 big days. I will bet that was probably a pretty big pullback. And then this following day, which is today, I am looking at this saying, huh, so this was a big pullback, volume is still pretty high here, certainly not as high as these prior 2-days. So after this big pullback like this on this kind of volume, I’ll bet that was a really weak bounce. I have got to be really careful about this because this is the one that concerns me. This right here after this, after the big move down, it’s high volume, I will bet that was a real doozy down and then that leads to, yes, a high volume rebound but pretty weak buying overall. That’s the way I would look at the volume. That is how I am just interpreting the volume without any price.
Now, let’s look and see what is happening if we look at the price in the context of volume. Huh, okay, interesting, this puts a little color on it. All of this stuff, fine, got it, just like I had anticipated it. This one, however, a little gap down and then a close, this closed 5 percent lower but it printed a higher high and a higher low. And I will say, crap, I was just looking at this volume, I figured this was a massive sell-off on that kind of volume.
Now I am looking at this thing and I am seeing, oh my god, this was it, 5 percent sell-off after what kind of move since we started on this day, opening day here? We got 42 percent into Wednesday and then at the high of the day, on Thursday, we are up almost 50 percent and all we get is a little goofy 5 percent pullback, that’s a rounding error. And so suddenly, you are looking at this saying, okay, what seemed like a pretty bad day on the price, when you look at the volume, it turns out this was not a bad day at all.
So suddenly this potential bearish move is actually very bullish. That’s the point, it is actually very bullish. You are going through your analysis, you are studying your pattern, you are studying the volume. And what you would think would be a bad day for prices, turns out to be a 5 percent pullback from a stock that has gone up like 50 percent, whatever. And then today, we got a little tiny gap down, where I loaded up a little bit more, and we got a close. Where? Well, 71.00 was the last, that was the closing price. The high was 72.45, that’s what you call a high closing location value.
So I have walked you through this move, where the institutions are obviously sucking up this stock. Lots of institutions are buying this. You look back here in late December, it was 6.2 million, 2.2 million on that particular day, 2.2 million shares traded back here. Now, we’ve got, on the high days we’ve got 16.6 million, so volume is definitely picking up. When you see this type of move, when you see the volume picking up like this, what that should tell you is, institutions are in this stock. That is all it should tell you, institutions are in this stock. If the price is going down and volume is picking up institutions are getting out of this stock. It is actually pretty simplistic.
And so that leads me to the payoff here, we got a nice breakout here. I have a Phase 1, 2, 3 way to look at these. Phase 1, you could say, well, crap, the phase 1 of a 3 phase move is this first move here. And then we got a pullback, a little correction, that’s Phase 2. And then the very next day we start Phase 3, OMG, this is unbelievable, that’s awesome. But wait, there’s more because we can look at it a little bit further down the line. Wait a minute, this is actually Phase 1, it goes up for 3-days. Phase 2, just like it was here, just one little goofy down day, 5 percent. And now this looks like we are heading into Phase 3, okay, fine.
This is what I am telling you, have $100.00 as your price target and I think you are good. Yes, that’s right. To quote Mark Levin, “That’s right, I said it”, $100.00 is what I am looking for.