- Vinco Ventures stock closes up 23% on Wednesday.
- BBIG is currently up 20% in Thursday's premarket.
- BBIG stock could be at risk of a fall based on momentum.
Vinco Ventures (BBIG) stock remains on track for some strong gains on Thursday despite other meme stock names beginning to falter. BBIG shares closed 23% higher on Wednesday at $1.39. BBIG has gained recently from meme stock exuberance, but it is still down nearly 20% for the year. The company recently spun off Cryptyde (TYDE) stock, so shareholders received it as a bonus issue. Interest in both names has remained high among retail traders, but we are on the watch for an imminent fall.
BBIG stock news
No major fundamental news is behind this rally – it is just a momentum play. Mostly retail traders are involved, and we are sounding a warning for an imminent turnaround. Other meme stocks have begun to fall as the retail rally might be running out of steam. We note that BBIG stock is up 20% in Thursday's premarket. If this gain is not held into the regular session, then it is time to exit in our view. This green-to red-change from pre-market to the regular session is a strong momentum indicator.
Note that BBIG is up 30% in the past month, so it has already exhibited a strong move. All of that gain has come in the past two days though. BBIG was up 58% on Tuesday before Wednesday's 23% gain. Already the intraday high on Wednesday at $1.68 is the key to maintaining this momentum with shares currently at $1.65 in the premarket.
BBIG stock forecast
This rally will fizzle out eventually, but when is the question? $1.68 is the key level to watch alongside the follow-through from premarket to regular session performance. A close anywhere below $1.60 signals it is time to get out of longs in our view. BBIG is already overbought on the Money Flow Index (MFI) and the Relative Strength Index (RSI) indicators.
Wednesday saw some decent interest in $2 calls for September 2. This was likely retail buying calls, which means volatility has been marked up. This makes selling them an attractive proposition, but I need to have stops in place as selling options exposes unlimited losses, which is why it is only for experienced traders. We also like buying $1 puts for September 2, which closed at $0.18 on Wednesday.
BBIG 1-hour chart
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