DW8 - big gap but can it be sustained.
DW8 is a stock that I've seen mentioned over a number of different trading discussion I participate and really it's a stock with Wine in its ticker, what's not to like.
The stock itself seems to have broken out of a consolidation period in around early Feb 2021, after a fairly heft rise from around May 2021 (around 4x). The catalyst for the current spike seems to have been earnings but I'm a technical trader so I haven't delved into that in any detail.
From a technicals perspective the 10 day MA seems to provide support for the uptrend which has been in play since mid-Feb.
Over March, there have been\ two major volume spikes in the stock, with the most recent one occurring last week (26 March), each of these big volume spikes this month has seen a sharp spike in price followed up a gradual pullback during the day.
Today (30 March), the stock showed a big open gap ($0.030 from the previous close) before spiking briefly $0.195 and closing at the daily 0.160 (still $0.015 above the previous close). Based on recent history, today's big red volume candle will likely see a pullback to around 0.110 (10 day MA) and if this isn't breached the trend is likely to continue.
I would guess a pullback is more likely to occur before the trend continues upwards given the larger divergence between price and the MA and price action and volume today, but anything is possible in the market, and doubly so with small caps.
I've certainly got this stock on my watch list for an entry following a pull-back.
If you've liked this analysis, do me a solid and check out my blog at nickthetraderguy.com
The stock itself seems to have broken out of a consolidation period in around early Feb 2021, after a fairly heft rise from around May 2021 (around 4x). The catalyst for the current spike seems to have been earnings but I'm a technical trader so I haven't delved into that in any detail.
From a technicals perspective the 10 day MA seems to provide support for the uptrend which has been in play since mid-Feb.
Over March, there have been\ two major volume spikes in the stock, with the most recent one occurring last week (26 March), each of these big volume spikes this month has seen a sharp spike in price followed up a gradual pullback during the day.
Today (30 March), the stock showed a big open gap ($0.030 from the previous close) before spiking briefly $0.195 and closing at the daily 0.160 (still $0.015 above the previous close). Based on recent history, today's big red volume candle will likely see a pullback to around 0.110 (10 day MA) and if this isn't breached the trend is likely to continue.
I would guess a pullback is more likely to occur before the trend continues upwards given the larger divergence between price and the MA and price action and volume today, but anything is possible in the market, and doubly so with small caps.
I've certainly got this stock on my watch list for an entry following a pull-back.
If you've liked this analysis, do me a solid and check out my blog at nickthetraderguy.com
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