From the RaZOR Trading Desk (Tuesday May 3rd, 2022)
Redbox Entertainment Inc (NASDAQ:RDBX) on Monday 05/02/2022, Redbox shares traded higher on extreme above-average volume @ 160 million shares on Monday with amid increased retail investor interest. We saw a sell-off later in the day on Monday and a further sell-off on Tuesday morning. But as low float stocks with strong market sentiment often do, the stock began to rally midday on Tuesday before selling off again into the close.
Redbox was a top trending stock on Stocktwits. This has created more buzz around the ticker symbol and there was even plenty of conversation on Redbox’s Reddit page found here: https://www.reddit.com/r/RDBX/
In addition, this past Thursday, Redbox announced receiving access to a line of credit worth $50 million. This was stipulated in a regulatory filing with the SEC.
From the daily chart, you could clearly see momentum and volume building as the average daily trading volume doubled, tripled and even exceeded 25x’s the daily volume.
If you look at this from a trading psychology perspective, you may begin to understand how other traders may be looking at the chart and the name in general. Although it’s not the biggest short squeeze candidate per se with an approximately 11.03% Short Float, retail traders may see this Movie Kiosk stock as the little train that could, just like GME!?
Many retail traders treat stocks like lottery tickets. And in this case, they may be looking at Redbox as the next big opportunity to take a massive chunk out of the market, similar to the previous parabolic stock moves on GameStop (GME) or AMC Theatres (AMC). If this theory holds water and the overall stock market cooperates, RDBX could be pushed to new yearly highs above $27.22 per share.
GameStop (GME) hit a high of $483.00 per share during a short squeeze on 1/28/2021. It’s low was a mere $3.77 on 7/20/2020.
AMC Entertainment Holding (AMC) hit a high of $72.62 per share during a short squeeze on 6/02/2021. It’s low was a mere $1.91 on 1/05/2021.
Redbox – Monday 05/02/2022: Gap 14.9%; Market Cap 333M; Float 8.83M. Redbox has a 12 month high of $27.22 on 10/26/2021 and the 12 month low at 1.61 on 2/24/2022.
“Redbox surgE to $11.00 on 05/02/2022”
RDBX Surged From $3.97 Low on Friday 4/29/22 To $11.00 on Monday 5/2/22
A key area of resistance @ the $10.00 mark became a key area for profit takers as we saw a flush on Monday just before $10.00 at the $9.97 level. The flush took RDBX down to the $8.10 area before pushing again to the $11.00 High of Day (HOD) as seen below.
It’s been quite some time since we saw a big brand name like Redbox go truly parabolic. Will retail traders rally around this ticker and will social sentiment pickup steam before shorts begin to see their opportunity to win out? Time will only tell…
At the time of this post at 12:00 PM CST, 05/03/2022, Redbox was trading down 0.44 but up from its lows.
Disclosure: I am holding 500 shares of RDBX from 04/29/2022 on a planned swing trade.
