Well, it didn't even come close to unfurling the way I thought it was going to when I first suggested it back on March 5th. I suppose there's more than one way to skin a cat though. What I'm talking about is a breakout from Wave Systems Corp. (NASDAQ:WAVX). While it took a round-about way of getting into a groove, WAVX has indeed worked its way into a bullish mode, and now that it has, it could roll for a while.
Just as a quick reminder, what I was expecting two months ago was WAVX to finally punch through a technical ceiling at $1.15. The stock had already put pressure on that level a couple of times since early January, but given that it was finally well supported at the time - and was due for a turnaround - I was willing to keep close tabs on the stock waiting for the breakout move from Wave Systems Corp.
We never got it. The stock took one more shot at $1.15 in late-March, but only kissed that level before peeling back under all of its key moving average lines. Thus ended a potentially-great trade before it ever even got started.... or did it?
10 Best Undervalued Stocks To Invest In Right Now
Yes, WAVX blasted past $1.15 on April 15th. The problem is/was, however, it left behind a huge gap with an even bigger jump, inviting an army of would-be profit-takers to cash it in. And sure enough, they did. Wave Systems peeled well of the high from April 15th, even sliding back under the $1.15 level last week. That doesn't appear to have been the beginning of a new selloff, however. From here, it just appears to be a burn-off of a temporary overbought situation. Now that it's done so, the bulls seem to be much more comfortable wading back in without the overhang of a big bullish gap. The move carried the stock back above all of its key moving average lines, and is now pulling away from them Take a look.
Point being, it may have gotten into this groove in an ugly fashion, but it got there all the same.
As for where WAVX may go from here, there is a trio of potential tops on the weekly chart that the stock could hit before rolling over again.... $2.00, $2.40, and $4.00. Note that they each may just provide a temporary cap on the rally, or could jump-start a more significant pullback. Either way, the trip between here and any of those levels could be a fruitful one.
For more trading ideas and insights like these, be sure to sign up for the free SmallCap Network newsletter. You'll get stock picks, market calls, and more, every day. Here's what you've missed recently.
No comments:
Post a Comment