You Ask, We Analyze: Could Vinco Ventures Slam Shorts Again?

On Sunday evening, Benzinga asked its followers on Twitter what stock they’re buying at the open on Monday? From the replies Benzinga selected one ticker for technical analysis.

@stock_doctor, @RStockInvesting, @IamMrRic, @yasersultan84, @Mr_Incredibul, @Royal_brx, @opers13 and @BHatchback are buying Vinco Ventures, Inc (NASDAQ: BBIG).

Vinco Ventures has been the target of two short squeezes so far this year, with the most recent squeeze taking place over eight trading days between Aug. 27 and Sept. 8 when the stock skyrocketed about 253% to a new all-time high of $12.49. Since then, Vinco Ventures has slowly bled down to a Dec. 3 low of $2.51.

Short sellers have been increasing their positions on Vinco Ventures throughout the bleed and the stock remains a possible short squeeze candidate due to its underlying statistics. Vinco Ventures has a relatively small float of 123.44 million shares with insiders and institutions owning 28.74% of the available shares.

Most notably, Vinco Ventures has a high percentage of its float held short: 28.58 million shares of Vinco Ventures’ float is held short, meaning 24.28%, which has increased from 25.11 million shares held short in October.

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The Vinco Ventures Chart: As Vinco Ventures has declined to its low, its daily trading range has tightened significantly as the volatility has decreased. On Friday, Vinco Ventures share price fluctuated just 28 cents between the $2.79 high-of-day and the low-of-day at $2.51. This indicates the stock has run out of both buyers and sellers and traders.

If Vinco Ventures is able to hold above, and possibly bounce up from, the $2.50 area on Monday it may create a triple bottom pattern on the daily chart paired with the price action of Thursday and Friday. A triple bottom pattern can be found at the bottom of a downtrend and can indicate a reversal to the upside is in the cards.

The stock’s relative strength index (RSI) has been hovering at or below the 30% level since Nov. 23, when Vinco Ventures suffered a bearish reaction to its earnings print. When a stock’s RSI reaches or falls below the level it becomes oversold, which can be a buy signal for technical traders.

There are three gaps on Vinco Ventures chart and because gaps on charts fill about 90% of the time it is likely Vinco Ventures will rise up to fill the ranges in the future. The closest gap falls between $3.56 and $3.57 and the second higher gap is between the $5.56 and $5.86 range.

Vinco Ventures is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is also trading well below the 50-day simple moving average, which indicates longer-term sentiment is bearish.

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• Bulls want to see Vinco Ventures hold above the $2.50 level and then for big bullish volume to push the stock up over a resistance level at $3.06, which may indicate the triple bottom pattern has been recognized. Above the level there is further resistance at $4.06 and $4.86.
• Bears want to see big bearish volume come in and drop Vinco Ventures down toward a support level at $2.16, which would indicate the downtrend is still intact. Below the level the stock has support at $1.55 and $1.21.