The Donald Trump-linked Digital World Acquisition Corp (NASDAQ:DWAC) stock has quieted as the former president's legal woes have ramped up.
Trump's Mar-a-Lago residence in Palm Beach, Florida, may soon be dubbed Marred-by-Legal following a report the estate was searched by FBI agents.
The search, which was reportedly about Trump’s handling of official White House records, is the latest fiasco for the former president, who has been wrapped up in numerous scandals and legal troubles, especially since his election in 2016.
Trump is also under investigation for his role in the Jan. 6 attack on the U.S. Capitol building, and he has been banned from various social media apps such as Twitter Inc (NYSE:TWTR) and Meta Platform Inc.’s (NASDAQ:META) Facebook site. In response, Trump Media & Technology group created an alternative social media site, Truth Social, and went public via a merger with Digital World.
Initially, Digital Worlds’ stock went parabolic on the merger news, soaring over 1,286% between Oct. 21 and Oct. 22, 2021. Although Digital World has since received short periods of bullish price action, the stock has slowly declined and, like the Truth Social app, has never enjoyed any long periods of even mild popularity.
Despite the recent uptick in Trump-based news reports, interest in Digital World continues to slump. At press time, only about 250,000 shares of the stock had exchanged hands compared to the 10-day average of 595,710. For comparison, Twitter’s 10-day average volume measures in at more than 10 million.
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The Digital World Chart: Digital World has been stuck in a small sideways trading pattern since July 15 between $29.61 and $33.32. The daily trading range has been tightening since Aug. 3 on lower-than-average volume, which indicates there is currently little interest in the stock.
- Lower-than-average is often followed by a sharp increase in volume, however, which could help to break the stock up or down from the horizontal range. The price action is taking place under a descending trendline, which indicates that a break up from the area could signal an eventual break up over the $33 mark.
- Digital World is trading below the eight-day and 21-day exponential averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading below the 50-day simple moving average, which indicates longer-term sentiment is bearish.
- Digital World has resistance above at $33.32 and $36.40 and support below at $29.61 and $27.48.
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