When it comes to Digital World Acquisition (NASDAQ:DWAC), the jury remains out on buying DWAC stock.

It’s been a tough year for most risky assets. The Nasdaq remains off by 24% and in a bear market. Even the least contested, most successful and most well-run companies like Microsoft (NASDAQ:MSFT) or Costco (NASDAQ:COST) have been caught in the crosshairs.

But a technical-based follow-through day (FTD) signaling on May 26 has favorably tilted the market dynamics for investors. Sure, bad actors like inflation or supply chain issues remain fixtures. Nevertheless, a confirmed rally is underway.

The idea may sound controversial, but the truth is all market bottoms which become bull markets have a FTD signal in place. Still, when it comes to a DWAC stock purchase, other battles need to be resolved first.

DWAC Stock Is a Contested TMTG & TWTR Stock

For investors who want to buy what they know and who see the new social media outlet Truth Social as a possibility worth investing in, special purpose acquisition company (SPAC) DWAC is the ultimate stock to own.

If all goes according to plan, later this year those shares will reverse merge with former President Donald Trump’s Trump Media & Technology Group and will probably trade under the TMTG ticker. What could possibly go wrong for DWAC investors, right?

Actually, any number of things, as some DWAC stock bulls have learned.

TMTG is inexorably linked with the ex-President’s professed free speech platform Truth Social. And it’s equally well known the startup is taking aim at Twitter (NYSE:TWTR) after Trump was suspended and subsequently permanently banned from the social media giant.

But Twitter’s contested decision involuntarily helped the Truth Social cause, or by association at least, the TMTG and DWAC stock frenzy.

DWAC’s Volatile All Aboard and Train Wreck History

Source: Charts by TradingView

In late October, Digital World Acquisition soared from its sleepy $10 net asset value to a spectacular $175 in the immediate wake of news it planned to merge with Trump Media & Technology Group. The Truth Social rollout was still months away, but aggressive campaigning in front of the launch was an exciting development.

And DWAC stock in all its glory, made sense to some of Trump’s base.

Less-committed believers, naysayers or more grounded stock price fact checkers then sent DWAC stock down more than 75% over the next month. Fairly and despite the steep loss, shares remained up by about 300% above NAV and yielding tidy profits for some of the early investors.

Then Donald Trump announced Truth Social’s launch date for Feb. 21. Shares rallied from the mid $40’s to nearly $102 into early March.

But now Twitter was back — and this time causing duress and potential harm for Donald and bullish supporters of DWAC stock.

DWAC Stock Today

It would be easy to be bearish and harp about how a delayed and still-not-fully-operational Truth Social platform is adversely impacting usership and how key tech personnel are exiting, or highlight short seller Kerrisdale Capital’s warnings about DWAC stock. And there’s obvious truth to all of that.

But since April, when word got out of Elon Musk accumulating TWTR stock followed by his announced (but iffy) bid to buy the social media platform and offer to reinstate Trump’s favored and much larger mouthpiece, Digital Acquisition World’s shares have been hovering near the post-merger-announcement lows. And that’s what has my singular focus where DWAC stock is concerned.

Today the notoriously volatile DWAC stock has quieted into its narrowest weekly trading range since shares stormed onto the scene. As such and if you’re bullish, I’d recommend waiting for the door on the price chart to open first. Wait for the breakout and then use an out-of-the-money bull call spread.

On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.