Reclaim + Breakout: A Textbook Small-Cap Execution (DGLY Case Study)

On May 27th, Digital Ally Inc. (DGLY) delivered one of the cleanest setups in the small-cap universe — and it played directly into our evolving strategy.

The Setup

• Market Cap: ~$6.9M
• Float: Low
• Volume: Surging
• Catalyst: News-backed run
• Chart Timeframe: 5-minute

We start the day with a morning washout. Price fades into the open, trapping weak hands below the red support zone — a typical small-cap shakeout. No entry here. We wait.

The Shift: Reclaim of Structure

Around mid-morning, price reclaims the support level, now acting as a launchpad. Volume confirms. The reclaim isn’t just a bounce — it’s controlled, held, and followed by tight consolidation.

This is where conviction builds. Smart money accumulates under the radar while emotional traders are either bag-holding or frozen on the sidelines.

ORB Breakout Confirmation

As the day progresses, price finally breaks above the Opening Range high (green line), signaling a momentum shift. The breakout candle comes with size — volume and price together. No faking this move.

• Entry: On breakout confirmation or reclaim base
• Risk: Just below the consolidation base
• Target: Let momentum dictate, scale along the way

Why This Trade Matters

This wasn’t a gamble. It was structure, discipline, and execution:

• No chase.
• No afternoon traps.
• No emotion.

Just a calculated reclaim + breakout in line with our ORB protocol.

Takeaway

If you missed this DGLY trade, don’t sweat it — study it. This is a template. Burn it into memory:

Morning washout → Reclaim → Base → Breakout → Close strong.