Trump's Media & Technology Group Corp. Declines 6.21% on July 05: Technical and Fundamental Analysis

StockInvest.us, 1 week ago

StockInvest.us Technical Analysis

The Trump's Media & Technology Group Corp. (NASDAQ: DJT) closed at $29.17 on July 05, 2024, marking a significant decline of 6.21% from the previous session. The price witnessed a range between $28.71 and $30.52 during the day. This shows heightened volatility, evidenced further by the high Average True Range (ATR) of 13.55. The stock's Relative Strength Index (RSI14) is at 35, suggesting it is approaching oversold conditions.

The MACD (3-month) of -6.23 indicates a downward momentum. Additionally, DJT is trading below its 50-day moving average ($43.03), signifying a short-term bearish trend, and slightly below its 200-day moving average ($31.49). The next notable support level lies at $27.66, while resistance can be expected around $32.75.

Fundamental Analysis

DJT has a market capitalization of $5.15 billion and an EPS of -0.43, resulting in a negative PE ratio of -67.84, reflecting continuous losses per share. This aligns with its discounted cash flow (DCF) of -0.26, suggesting poor intrinsic value based on future cash flows.

However, recent news highlights long-term positive developments: a perpetual licensing deal for new technology in Truth Social TV streaming and a substantial equity financing arrangement intended to fund expansion over the next three years. Additionally, DJT has reinvigorated its cash reserves with over $105 million from recent warrant exercises, accumulating more than $350 million in available cash and no debt.

Short-Term Outlook

Trump Media & Technology Group Corp. Given the stock's recent volatility and decline, it is likely that DJT may experience further short-term pressure. With RSI14 nearing oversold levels, there could be a minor bounce or stabilization near the $27.66 support level, but resistance at $32.75 might prove challenging to break in the immediate term. The fundamental announcements could lead to short-term sentiment-driven volatility.

Week's Prediction

For the upcoming week, DJT may demonstrate mixed performance. While the negative MACD trend and technical indicators suggest continued bearish pressure, the recent fundamental news might generate investor interest and potential buying activity. Any sustained rally will need to overcome current resistance while finding strong footing above its support.

Intrinsic Value and Long-Term Potential

From an intrinsic value perspective, DJT's negative EPS and DCF portray a challenging outlook, implying that the stock is overvalued based on current fundamentals. However, the company's strategic moves towards technological expansion and substantial funding may yield long-term growth prospects. Without debt and a robust cash position, DJT exhibits some financial stability conducive to long-term operations.

Overall Evaluation

Categorizing DJT as a 'Sell,' 'Hold,' or 'Buy' candidate:

Hold: DJT currently warrants a hold status. While the immediate technical indicators suggest potential near-term risks, the substantial cash infusion, lack of debt, and strategic expansion plans provide room for long-term upside. The company needs time to translate these strategic plans into financial performance improvements. Investors might consider holding their positions while monitoring technical signals and fundamental progress closely.

Check full Trump Media & Technology Group Corp. forecast and analysis here.