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Since Friday last week, the headlines surrounding low floats have been dominated by one stock in particular.

Vinco Ventures (NASD: BBIG) has grabbed all of the attention.

The stock has been mentioned across popular social media platforms as a potential short squeeze play.

The low float market has certainly heated up lately, with numerous low float stocks trading abnormal volume and experiencing impressive gains.

This comes as no surprise as the overall market continues to trade at highs and the IWM, which tracks US small-cap stocks, approaches highs.

The IWM has bounced off the support zone of $210 and appears to be holding up in the upper portion of the range, which is a bullish signal for small caps.

The current market conditions favor the bulls as the IWM approaches highs, leading towards more speculative capital flowing into low floats and small caps.

Which makes it perfect time to talk about what’s happening with BBIG.

What is BBIG?

BBIG is so far having a week and a month to remember. The stock is up 105.83% over the month, 186.99% on the week, and 415.33% year to date.

BBIG, per Yahoo, “operates as a consumer product research and development, manufacturing, sales, and fulfillment company in North America, the Asia Pacific, and Europe.

The company offers toys, plush, homewares, and electronics to retailers, distributors, and manufacturers through e-commerce channels; and personal protective equipment to governmental agencies, hospitals, and distributors.”

Market Cap: 255.92M

Float: 40M

ATR: 0.84

Short Interest: 50.68%

Average Volume: 23.54M

On the 23rd of August, 2021, the company reported worse than expected earnings. The company reported quarterly losses of $-5.13 per share compared with $-0.18 from the same period last year.

The company reported $2.69M in sales for the quarter compared to $5.17M in the same period last year. This is a 47.97% decrease.

The decline in revenue was primarily due to weakening sales of personal protection equipment by its Edison Nation Medical unit.

What is the catalyst driving the stock higher?

Shares of BBIG have increased rapidly over the last two trading sessions as the stock experiences abnormally high volume.

The increase in volume is a result of increasing interest from retail traders. The stock is trending across social media platforms as traders discuss the stock’s potential as a short squeeze candidate.

The stock has traded close to 570M shares over the last two trading sessions. That figure compared with the average volume of the stock, 23.54M, is staggering!

With that degree of interest and abnormally large volume, it is no surprise that shares of BBIG are surging!

What’s next for the stock?

Since the stock’s volume and interest increased last Friday, the stock has continued to hold above support.

At the time of writing, the stock is currently trading firmly on the front side. By the front side, I mean that the stock is still innocent until proven guilty, and the bulls remain firmly in control as shares hold above key support levels.

In the future, $6 and $7 will act as critical support levels. $7 is a key support level from yesterday, as the stock failed to hold below this level. Throughout the day, buyers held this level, and therefore $7 has become a level of interest from now on.

$6 is the high from Friday, and this level is now the final line in the sand for bulls. Below $6, momentum could shift, and the bears could take control.

Yesterday afternoon saw $8 turn into a critical level of resistance. From now on, the bulls will want to see price hold above $8, which would be a sign of strength and could signal further upside.

The bulls will not want to see the stock fail to hold above $6. If the stock holds below $6, that could signal the end of the front side and momentum to the downside could follow.

$10 is the high from yesterday and acts as the all-important level of resistance.

For the stock to have further upside momentum, shares of BBIG will need to break above this level and hold above. If that move takes place over the coming days, there could be another leg to the upside.

Author:
Jeff Williams

Jeff Williams is a full-time day trader with over 15 years experience. Thousands of entry-level and experienced traders alike – day-traders and swing-trade small cap stock traders – credit Jeff with guiding them to turning small accounts into big accounts.

Jeff’s "Small Account Challenge" shows people how to transform accounts from a few thousand dollars into $25k, $50k or even $100k.

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1 Comments

  1. Lucky enough to get in at 8.33 and out the next morning just over 10. When I set my sell limit order right after the purchase, I didn’t expect it would trigger so soon, but it did.

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