Trump Media & Technology Group ($DJT) Surge 18%

Sep 13

Shares of Trump Media & Technology Group (DJT) saw an 18% surge after Donald Trump reaffirmed his commitment to the social media platform **Truth Social**, stating that he isn’t selling his majority stake and will remain on the platform. This comes as a key moment for both the company and its investors, especially with upcoming opportunities for Trump and insiders to potentially sell shares.

The Whole story
The rise in DJT stock can be attributed to Trump’s strong influence, given that he owns 57% of Trump Media, making his stake worth around **$2 billion** after the recent stock surge to **$17.89**. However, the company's fundamentals tell a different story. Trump Media, despite once having a $10 billion valuation, has faced declining share prices, especially as political uncertainties and Trump's legal issues have surfaced.

Revenue Concerns:
Trump Media’s revenue performance is relatively modest, equivalent to just two Starbucks outlets, generating a loss of **$869,900** in the quarter ending June 30. This shows a significant disconnect between the company’s stock market valuation and its actual earnings. This highlights the speculative nature of the stock, which often sees spikes based on news related to Trump, rather than strong underlying business performance.

Market Valuation:
At a **$3.6 billion** valuation, many strategists argue the stock is overpriced based on its fundamentals. The business itself lacks robust revenue streams and has been categorized as a high-risk speculative investment tied heavily to Trump’s political future.

Key Upcoming Events:
- Insider Selling: Trump and other insiders will soon have the opportunity to sell shares after September 20 if the stock price holds above **$12**. There’s anticipation that if insiders start selling, the market may see a flood of shares that could drive the price down, although Trump’s announcement that he won’t sell could stabilize the situation for now.

- Elections Impact: Investors are closely watching the outcome of the **2024 U.S. presidential election**. Trump's success or failure could have an enormous impact on DJT, as the stock is largely seen as a speculative bet on his political chances. If Trump were to win, there’s potential for a significant rally in stock prices due to renewed market confidence.

Technical Outlook
As of writing, DJT stock is up **11.91%**, reflecting optimism from Trump’s statement. Here’s a breakdown of the technical indicators:

- RSI (Relative Strength Index): Currently at **37**, indicating that the stock is still in the oversold territory, though moving towards a neutral stance. The RSI suggests there could still be some volatility ahead as the stock struggles to break out of its long-term downtrend.

- Trend Channel: DJT has been in a falling trend channel for some time, struggling to sustain a bullish reversal. The appearance of a bullish hanging man pattern on the daily chart offers some optimism for a potential upward move.

- Support and Resistance: Key support is observed at **$12**, while the next major pivot point lies at **$30**. For a more sustainable bullish reversal, the stock needs to break this $30 resistance. A successful rise to this level could lead to a larger rally, especially if linked to positive political developments for Trump.

- Market Sentiment: Retail traders dominate DJT, which has led to significant volatility. Positive political sentiment around Trump, such as his participation in the upcoming election, could drive further rallies, but there are risks of price pullbacks if sentiment shifts or if large-scale insider selling begins.

Conclusion
While DJT shows signs of bullish momentum following Trump’s statements, its underlying fundamentals raise concerns. Investors should remain cautious, given the speculative nature of the stock. The upcoming election and potential insider stock sales are key catalysts that could either drive the stock to new highs or cause significant declines. A rally to the **$30 pivot** would mark a crucial point in its recovery, but this largely depends on external political factors and market sentiment surrounding Trump’s presidential bid.