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In terms of individual stocks, one has grabbed the headlines over the last two days, and rightfully so!

This stock has Made SPACs Great Again. Heck, it’s made small caps great again too!

By now, you should know what I am talking about.

DWAC, of course.

Digital World Acquisition (DWAC) was up 356.83% on Thursday. Yes, you read that correctly.

The move came after it was announced that DWAC, a special purpose acquisition company (SPAC), announced a deal to merge with Trump Media and Technology Group.

Should the deal go through, the Trump Media company said it plans to launch a new social network.

As a result of this press release, the stock soared 356.83% on day one and traded close to 500M shares.

The range, small float, the news and headline, volume, and volatility created exceptional opportunities, and of course, I was waiting for the right moment to pounce.

But before I recap my trade, let’s take a look at the technicals of the stock.

Market Cap: 1.31B

Shares Outstanding: 28.75M

The action yesterday in the stock was immense. From the morning till the close of the after-hours session at 8 pm, the opportunity in the stock was endless.

The above chart shows how the stock cleanly held above the trendline and offered four consolidation breakout patterns, all of which had fantastic follow-through and momentum.

Going into day two, I had the following levels of support and resistance from day one. $65 support, which at the time acted as the support of the uptrend. $50 support, which was resistance in the afternoon on day 1. My targets and potential areas of resistance were $80 – $100.

The Trade

I bought the stock yesterday afternoon at $43.28, as the stock closed strong and above support. Volume in the stock was immense, and for the entire day, the stock continued to make higher lows and highs, firmly holding the uptrend.

My plan from the get-go was to hold my position as long as the uptrend remained intact, looking for $80 – $100 in the after-hours session or pre-market the following day, as the action from day one led me to believe that the stock had trapped shorts and would gap higher.

To put it simply, I was right.

I sold ⅓ of my long the following day in the pre-market at $77.25. That sell represented a 78% gain.

I sold another ⅓ of my long shortly after the first sell, at $84. That sell represented a 94% gain.

I sold half of what remained at $100, representing a 131% gain.

Finally, I sold the last part of what remained at $128 for a 195% gain of the open.

That all adds up to an average of a 124.5% gain!

Not bad, if I can say so myself.

The Bottom Line

Not only has this stock presented immense opportunities it has also sparked many sympathy plays and has the potential to create a wild trading environment for small caps into year-end. Hopefully, this is just the beginning of what is to come into year-end.

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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6 Comments

  1. I would like to learn more about it please. I’m new and no nothing about Stocks, but I’m ready and eager to learn. Thank You.

    1. I would love to chat with you and go over your options with Raging Bull. I can be reached at 443 870-4406.

      Jeff Brown
      Customer Service

    1. Kirk, this was a live trade I did right in the Trading Floor chat room. Post marked here
      Oct 21, 2021 at 3:17 PM – Jeff Williams : End of day list: DWAC entry under $50 target $75 (yup call me crazy) ILST entry under $.02 target $.023 $.025 area, QTT entry around $1.30 target $1.50s, WTRH entry under $1.70 target near $2, CIVX entry around $.013 target $.015s

      Oct 21, 2021 at 3:41 PM – Jeff Williams : Bought DWAC for over night play at $43.28 looking for possible gap up and run tomorrow maybe $70 target, who knows

      Oct 22, 2021 at 8:01 AM – Jeff Williams : Sold 1/3 of DWAC $43.28 to $77.25
      Oct 22, 2021 at 8:14 AM – Jeff Williams : Sold 1/3 more DWAC $84 from $43.28
      Oct 22, 2021 at 9:25 AM – Jeff Williams :Sold another 1/2 of DWAC at $100 from $43.28
      Oct 22, 2021 at 9:30 AM – Jeff Williams : Sold last part of DWAC at $128 from $43.28

  2. I would love to chat with you and go over your options with Raging Bull. I can be reached at 443 870-4406.

    Jeff Brown
    Customer Service

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