Tuesday, April 3, 2007

Microvison Cup & Handle Conformation Needed

The next few trading sessions could mark a very important mile stone for Microvision Inc. (MVIS). Today, shares moved to a high of $4.13 on greater than 2x daily average volume. Unfortunately, the move was unable to break resistance previously set at $4.18. As the chart above depicts, MVIS formed a substantial Cup & Handle formation on the daily chart over the last year. However, for conformation the stock needed to break resistance at $4.08 and $4.18. A conformation is signified as a high volume move above resistance, a morning gap up or a successful close above this level.

As it stands now, MVIS is at a critical juncture within its technical landscape. If we can achieve conformation over the next several trading days the Cup & Handle will be complete and we could be looking at a breakout target of $6.30. However, if a breakout fails and we form a Triple Top there could be significant downside.

Given the strong volume today and subsequent test of resistance, I see the breakout occurring this week(Hopefully, in accordance with fundamental developments). Since I am currently long a significant holding in MVIS I refrained from adding additional shares at this point.

2 comments:

TradingGoddess said...

Thank you for the analysis. I am long as well.

Good luck and keep up the good work here!

:)

CNL said...

Thanks! TG I will try.