Benzinga - Digital World Acquisition Corp (NASDAQ: DWAC) gapped up more than 7% on Friday in reaction to former President Donald Trump being indicted on Thursday, an event Tesla Ceo Elon Musk previously said would mark the beginning of his reelection.
Despite Musk reinstating Trump’s Twitter account last November, the 45th president has declined to return to the platform, preferring to communicate with the public through his Truth Social platform, part of the Trump Media & Technology Group which Digital World plans to take public.
Traders and investors likely believe Trump’s decision to stick to Truth Social, paired with his indicted and looming arraignment expected to take place early next week, will drive traffic to the platform.
The news caused Digital World to break up bullishly from a triangle pattern that the SPAC had been trading in since March 20, the first trading day after Trump announced on Truth Social that he was expecting to be indicted.
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The Digital World Chart: Within the triangle, Digital World had been trading in a tightening formation, making a series of lower highs and higher lows. The SPAC was set to reach the apex on Friday, which suggests the pattern was recognized.
- Friday’s gap higher caused Digital World to regain the eight-day and 21-day exponential moving averages (EMAs), which is bullish. Bullish traders and investors want to see the SPAC hold above the 21-day EMA and if that happens, the eight-day EMA will eventually cross above the 21-day, which would give bulls more confidence going forward.
- Bulls want to see Digital World regain the 50-day simple moving average, although the SPAC may need to consolidate under the area for a period of time at least on smaller time frames. Bearish traders want to see the SPAC reject that level and then for big bearish volume to come in and knock Digital World back down under the upper descending trendline of the triangle.
- Digital World has resistance above at $16.18 and $17.33 and support below at $14.16 and $12.62.
Read Next: DWAC Surges 11% As Trump Vents Out On Truth Social
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