What a week for MVIS longs and next week could be even better!!!
MVIS tore the roof off of price action this week with an astonishing run from $10.80 to $17.97 with a high for the week at $19.14 for a smooth 90% gain in share price. That’s quite the move for 5 days worth of trading. I talked about a hidden bullish divergence on the RSI last week in the Gator Traders MVIS Manipulation post where I also theorized about a potential major (and intentional) reversal coming this week. I wrote about it again here.
Skip to the conclusion if you do not want to know all of the details that I look at to form the conclusion that will answer the question “Up or down and how much?”
So what can we expect for next week?
Upcoming Catalysts . . .
Investors in Microvision (MVIS) have been patiently waiting on news from the company regarding automotive LiDAR. The CEO, Mr. Sumit Sharma, has promised completion of the A-Sample by April 2021 and has stated that they expect that device to meet or exceed all OEM specifications as well as the capabilities of their competitors. Mr. Sharma refers to this device as “best in class.”
MVIS has announced an April 29th earnings report date which is ahead of the estimated date of May 6th by most brokerages.
Conference calls following earnings reports have in the past revealed rich details about the company’s position and status in the pursuit for partnerships and strategic alternatives including merger or sale of the company as well as details about tech and progress.
Also being watched is a possible shift in financials due to the IVAS contract awarded to MSFT by the US Government which would give the final clue needed to unveil the “2017 customer” as none other than Microsoft. (As if the Hololens 2 teardown by s2upid were not enough).
See the Gator Traders article about IVAS here from my own personal perspective as an MVIS investor and a combat veteran with the US Army Infantry as well as how MVIS is HIGHLY LIKELY to be a critical component to this revolutionary war-fighting device.
Either news about the LiDAR or a shift in financial status (or both) could send MVIS share prices through the roof. And with some deep work being done by investors, it would appear this this is just the beginning of price action.
And the chart agrees.
Weekly Chart . . .
Weekly candles. Linear scale chart.
I have two pairs of lines. The yellow lines are an abstract resistance line taken from the tops and the bottom one is a Newtonian extrapolation (clone) of the first. Note the channel and the precision of the line work.
The second pair of white lines are static lines that form a channel between $9.74 and the dreaded, loathed, and despised $17.50. All trading opening and closing prices have occurred within this range since the week of 01 March 2021. Yesterday (April 23rd, 2021) we broke out of that channel.
RSI is at 62.5 and bounced off of 51.7. That’s a fancy way of saying that MVIS never had a bearish breakdown of trend momentum on the weekly chart. There are no noteworthy divergences on the weekly RSI currently.
Note the yellow circle where price bounced up from the 21 period simple moving average. Learn more about this technique in my Good Basic Chart series on YouTube.
The aforementioned bull flag pattern is hinting at a possible move to $36.77.
That is not a typo.
THIRTY SIX DOLLARS and SEVENTY SEVEN cents per share which is a 91% gainer from current price!!!
Double up, anyone?
What do we need to see to get there?
Obviously, news would help. Improving financials, profitability, and / or LiDAR news would certainly help. News about a partnership or merger would seal the deal.
But, watching the chart, we need to see a break and hold over 2 key levels in price.
- Static resistance at $17.50 – check
- Dynamic resistance at $18.75
Key support on the weekly, currently is as follows :
- Static support at $17.50 and has been tested in lower time frames – check
- Static support at $15.30
Let’s fine tune the details with the lower time frame charts.
Daily Chart . . .
Daily Candles. Linear Scale Chart.
The two pitchforks shown both validate well and have different anchoring points. Note the intersection between the centerline of the yellow fork and the .618 line of the green fork. That’s April 27, 2021. Intersections like this show areas of monumental support or resistance, so expect price to react accordingly whether it is above or below that point.
$17.50 is key support at the moment. Watch for stupid games pre-market as bears will want that to become resistance again.
The yellow fork is less abstract and should be regarded more strongly than the green one, even though both validate. With that said, MVIS price action is battling the center line at a key pivot point in price ($17.50). Expect that battle between $17.50 and $20 to be very intense.
Volume has been spiking as well. This is important because using volume shifts with trend directions and the volume that propelled price on Friday, April 23rd, was very significant in terms of sentiment.
Price is crunched up near the upper edge of the Bollinger band and the centerline of the pitchfork. Added to the fact that there is a key intersection that should act as resistance, I expect price to flag on the daily chart. We can’t see it yet, and I could be wrong if volume continues. It could just rip the roof off and forget about flags altogether.
Volume will reign supreme here another huge volume day could send prices soaring over resistance and flying in defiance of the lagging indicators like Bollinger bands. We’ve seen this before in MVIS.
RSI broke out of a down trending resistance level and is currently at 62.5 This is a heathy number and what you want to see to validate upward movement. No noteworthy divergences on the daily either.
Key support levels added to the chart are in yellow at $16.67, $15.78, and $14.18.
There’s one final piece to the puzzle worth considering. And this one should get you excited.
Onward to the 4 hour chart.
Four Hour Chart is extremely bullish . . .
4hr candles. Linear scale chart.
Has the suspense been killing you? Are you dying to know what may pop us over all the critical resistances and set MVIS into orbit? Well, I will not delay you further.
There is a bull flag / pennant possibly forming that could confirm anytime between opening and closing on Monday, April 26th 2021. This flag / pennant (we don’t know what it is or if it is one yet) has a movement potential of about $5.54 to the upside which would bring price to an astonishing $23.52 for a 31% gainer.
Note the parallel blue lines using the same Newtonian extrapolation technique from earlier. Expect the center one to behave as a support.
The RSI is high on the 4hr and could indicate some intraday / multiday cooling off for Monday and Tuesday. That dynamic support line is going to be a key to keeping this potential pattern alive.
Key resistance to break and hold on the 4hr chart is $17.97 followed by $19.14.
Key support is shown and will change with each candle. It is currently at $16.57 and rises $0.50 (approximately) every 4 hours.
Conclusion . . .
I fully expect the bull flag on the 4 hour chart to actually grow in range with potential contact around the $16-17 mark if prices fall. This is due to consideration of the high RSI and assuming that $17.50 fails as a support. For the record, $17.50 -should- hold. It should be as strong for bulls as it was bears.
- The bull flag / pennant’s confirmation will likely increase volume and sentiment, pushing prices to price target #1 of $23.52.
- Resistance should be heavy between $23.52 and $24.18 as we approach the 10 year high. Price target #2 would therefore be $24.18.
- After that, not much is standing in between $24.18 and $36.77 that can be determined by the chart currently.
I expect the flag / pattern on the 4hr chart to confirm late Monday thru Wednesday morning, depending on volume and sentiment of volume. It could confirm much sooner if volume smashes the ask at open.
Key support levels :
Key resistance levels :
Good luck out there. Thank you for reading!
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