Datavault AI issued a formal rebuttal to a short-seller report, asserting the claims were false and defamatory and signaling intent to take offensive legal action. In microcaps, management’s rapid, emphatic response can catalyze sharp relief rallies by (1) stabilizing sentiment among existing holders, (2) dissuading fence-sitters from capitulating, and (3) forcing shorts to reassess risk if legal threats escalate. The company’s statement (via GlobeNewswire and also reflected across Yahoo’s news feed) directly addresses IP strength and strategic direction, which are central to the short thesis. This is an actionable, near-term sentiment catalyst rather than a long-duration fundamental shift, favoring a short 6-day swing horizon. Technicals reflect a compressed spring after outsized volatility. Price last traded at 2.0152 (prior close 2.52) with intraday ability to swing from 1.80 to 2.57. The 9- and 21-day EMAs (~2.53/~2.23) sit above/near spot; RSI near 49 indicates balance after a sharp fade. MACD histogram is slightly negative, but that’s common after a news shock; if the rebuttal narrative gains traction across social and coverage, a snapback toward the 21-day EMA and recent highs is plausible. Our entry at 1.90–2.10 brackets current price and allows for early-session volatility. We set a stop at 1.65 (below the recent intraday floor), respecting that microcaps can pierce levels briefly. Targets at 2.30–2.50 represent approximately +10% to +25% upside from the entry range midpoint and simply revisit the zone seen pre/promptly post-headline. Volume is a feature, not a bug: the 2-week average volume is elevated (per supplied fundamentals) and the float is large enough for liquidity, yet the tape remains highly reactive to news. While one Yahoo piece highlights a media personality’s criticism of losses (common for early-stage tech), it doesn’t negate the legal/sentiment catalyst we’re trading. We weight the company’s fresh, specific rebuttal more heavily than generic critiques when the time frame is days, not quarters. Short interest dynamics in the historical data aren’t extreme, but day-to-day short volume ratios have been elevated in microcaps; a positive narrative turn can force covering. Risks are clear: this is a high-beta, headline-driven bounce attempt. If legal action doesn’t materialize or new allegations emerge, the stock can retrace quickly. Risk control is paramount—hence the 1.65 stop and the 6-day window. The goal is not to underwrite long-term valuation, but to capture a reflexive sentiment swing after the company drew a bright line under the short report. With a defined entry, tight risk, and realistic exits aligned to recent trading ranges and moving averages, the setup meets the 10%+ upside criterion with asymmetric potential toward 2.50 if momentum returns.