3 Stocks Under $10 in Breakout Territory
BY Roberto Pedone
10/24/14 - 08:13 AM EDT |
Spherix (SPEX) operates as an intellectual property company that owns patented and unpatented intellectual properties. This stock closed up 2.5% to $1.23 in Thursday's trading session.
Thursday's Range: $1.16-$1.28
52-Week Range: $0.75-$13.70
Thursday's Volume: 812,000
Three-Month Average Volume: 1.18 million
From a technical perspective, SPEX jumped modestly higher here right above some near-term support at $1.13 and back above its 50-day moving average of $1.22 with lighter-than-average volume. This trend higher on Thursday briefly pushed shares of SPEX into breakout territory, since the stock flirted with some near-term overhead resistance levels at $1.25 to $1.27. Shares of SPEX tagged an intraday high of $1.28, before it closed just off that level at $1.23. This move is now quickly pushing shares of SPEX within range of triggering another near-term breakout trade. That trade will hit if SPEX manages to take out Thursday's intraday high of $1.28 to some more near-term overhead resistance at $1.30 with high volume.
Traders should now look for long-biased trades in SPEX as long as it's trending above Thursday's intraday low of $1.16 or above more near-term support levels at $1.13 to $1.10 and then once it sustains a move or close above those breakout levels with volume that hits near or above 1.18 million shares. If that breakout kicks off soon, then SPEX will set up to re-test or possibly take out its next major overhead resistance levels $1.58 to $1.74.
The big money will be in with the Nortel patents. I'm not saying there won't be good returns for those that buy Spherix at the current share price. 500% is a great return, Rockstar has sold patents to Spherix for shares plus participation in any awards connected to the Nortel patents.
My point is that huge awards won't go 100% to Spherix's balance sheet. If the Nortel Patents are worth the $4.5 billion that Rockstar paid for them and there are awards Rockstar will own 50% of Spherix plus have a big stake (a large %) in the award.
The big plus at this stage (so far no profits/ income) is Rockstar won't let Spherix go out of business .
Sentiment: Strong Buy
it's a breakout pattern, next week the price will go even higher, Any pull back( I doubt that though) will be a buying chance, that's why we see a lots of buyers try to squeeze in.
Cravi, if you bought at $8.35 I would agree with you. If you bought at $1, like myself, I think as small investor you have much more to gain than Rockstar, also because AT&T, T-Mobile and V-Tech/Uniden lawsuits are not part of the 101 ex-Nortel patents deals. By the time Rockstar breaks even you would have had already a 500% Return on investment
Rockstar has much more to gain than small share holders.
.Spherix issued $60 million of its securities at an issuance price of $8.35 per share of common stock (or 100% of the closing bid price on the date prior to issuance) for the Rockstar Patents. The Company issued (i) 199,990 shares of common stock, per value $0.0001 per share (the "Common Stock"), (ii) 459,043 shares of Series H Convertible Preferred Stock, par value $0.0001 per share (the "Series H Preferred Stock") and (iii) 119,760 shares of Series I Convertible Redeemable Preferred Stock, par value $0.0001 per share (the "Series I Preferred Stock" and, collectively with the shares of Common Stock and Series H Preferred Stock, the "Securities"). Additionally, Rockstar is entitled to a participation in future recoveries under the Rockstar Patents after the Company receives 100% return on the value of the issued Securities (i.e., $120 million).
The participation after 100% recovery is the key issue it is a plus and a minus. Plus is Rockstar won't let Spherix go out of business The minus is it limits the amount that Spherix will get in winning any lawsuits connected to Nortel patents.
Sentiment: Strong Buy
If highest quality, I hope SPEX is hanging tough. No way to tell yet. Once one settlement or case is decided, and it looks great, the rocket goes off.
I think 5 - 10 dollars is the high probability scenario given all settlements. 50-300 dollars per share requires a massive jury win, and you wont see such a thing for years. But it is possible, just I don't bet on that. Good luck
Sentiment: Strong Buy
I tend to agree, but we are dealing with a legal system with subjective thinking human beings- nothing is objective in these court proceedings, even though all parties would claim otherwise, at least on paper. It has always amazed me how strangely varied decisions tend to be by a court on any given issue. It simply proves my point....
I sold today for a nice profit from 1.04. Will start to add again as it falls back down. Rinse and repeat now for the last few months. Making a killin!