Some important theories people forget frequently. First of them is business has a normal life cycle which goes under peak and recession; and second one is that capital market has periodical bull and bearish nature, which alters from time to time with each other. And, the third one is market correction.
I think the recent price declining trend of MGT is due to the above universal truths. On October 19, 2012 the company (NASDAQ:MGT) was closed at $3.01 at Nasdaq; however, just after two weeks on November 02, 2012 the company peak to $6.99 at the same bourse. The company gave more than 100% return due to double price increase within a few days. Following the nature of market, MGT has gone through a normal price correction from its peak. The company was closed at $2.94 on yesterday (14.02.2013).
If we review MGT’s price movement for the last few days, we find that price of MGT stays at stable; which we consider as support level. Amid the continuous price correction, it is notable that movement of MGT stock has increased as compared to its trading volume at peak time. Is it an indication of upturn? Sometimes, support breaks down and sometimes upturns, what is going to take place for MGT?
Before making any prediction we may revisit the company’s phenomena. The first comfort of MGT is that the company is going to report more revenue in 2012 as compared to 2011, which we assume from its nine months operating result (from January 2012 to September 2012). Second, operating expenses of the company has reduced significantly. Third, MGT has retained Munich Innovation Group (to license or sell MGT’s portfolio of international medical imaging patents associated with its wholly-owned legacy subsidiary, Medicsight, Inc), which is considered as an affirmative initiative of the company. Fourth, the company has taken some steps to increase revenue (as state by the company in SEC Filling).
If the company is really able to show better performance of operation, price of stock of MGT may upturn today or tomorrow.