DJT Stock Drops 8.88% Amid Volatility; Possible Rebound as Bakkt Acquisition Talks Continue

Technical Analysis

Trump Media & Technology Group Corp. (Ticker: DJT) closed at $29.87 on November 19, 2024, marking a decline of 8.88% from the previous session. The stock's price fell within the range of $29.11 to $30.83, suggesting increased volatility likely attributed to news-driven events. The Relative Strength Index (RSI14) is 39, placing the stock in the oversold territory, which may indicate a potential short-term price rebound. The stock price remains under the 50-day moving average of $25.56 but is above the 200-day moving average of $34.77. This situation suggests an ongoing short-term bullish trend amidst a broader bearish context. The Moving Average Convergence Divergence (MACD) is positive at 1.59, further supporting the prospect of a price rebound. The Average True Range (ATR) of 17.07 highlights considerable volatility, potentially leading to sharp price movements. Current support and resistance levels are identified at $27.70 and $33.94, respectively.

Fundamental Analysis

The company presently holds a market capitalization of approximately $6.48 billion with a notably negative Earnings Per Share (EPS) of -$0.42 and a Price to Earnings (PE) ratio of -71.12, reflecting underlying financial challenges. Recent reports of DJT in negotiations to acquire the cryptocurrency platform Bakkt have influenced market sentiment. Such an acquisition could diversify DJT’s business model into the cryptocurrency sector, which might align well with the bullish trends in digital assets. However, the DJT's discounted cash flow (DCF) is deeply negative at -$0.65, suggesting that future cash flows are insufficient to justify its current market price. The stock's 52-week range between $11.75 and $79.38 reflects substantial volatility, often driven by speculative trading.

Near-Term Price Predictions

For the next trading day on November 20, 2024, DJT might experience additional volatility as investors digest the implications of the Bakkt acquisition talks. Given the oversold RSI and a positive MACD, a minor technical rebound may occur, with the stock likely testing the immediate resistance at $33.94.

Throughout the upcoming week, much will depend on further developments regarding the acquisition news. If negotiations progress positively, DJT may experience heightened speculative interest, potentially pushing its price towards the higher resistance level. Conversely, any negative news or delays could exacerbate the recent downtrend.

Intrinsic Value and Long-Term Investment Potential

Despite DJT’s potential entry into the cryptocurrency market presenting a growth opportunity, the company’s negative earnings and concerning DCF metrics raise red flags regarding intrinsic value. Unless DJT can substantially improve its financial performance or harness significant value from potential acquisitions like Bakkt, long-term investment potential remains uncertain. The stock should be considered speculative, with high risk until fundamentals become clearer.

Overall Evaluation

Currently, DJT appears as a 'Hold' candidate. The potential acquisition of Bakkt introduces opportunities for the company but also risks, given the volatile nature of the cryptocurrency market. Investors might decide to observe the short-term effects of these developments before committing further capital. A decisive shift to 'Buy' would necessitate a more favorable financial outlook and reduced volatility, while any deterioration in fundamentals or further stock declines could shift sentiment towards a 'Sell.'