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MGT Capital Investments, Inc. Message Board

  • investora2z investora2z Apr 18, 2013 7:51 AM Flag

    200 DMA should provide support

    The 200 DMA was crossed decisively on 15th April with volumes in excess of 840K. The volume on the day prior to that was 450K, and the three month average is 91K. However, the move beyond $4.25 was not very robust and hence the stock corrected slightly. Now the 200 DMA ($3.90) should provide strong support and the next level to watch will be $4.70. If the current momentum manages to take it above $5.10 within the next few weeks, then the ride will become smoother. It is already up by 54% from the recent low of $2.76 in February, and it is up 118% from its 52 week low of $1.95 in April last year. The good part is that the current positivity is based on news flow relating to the patent monetization lawsuit filed by MGT against gaming companies. There was news that MGT is being approached by gaming companies for settlement and the settlement amount is significant. The company has not confirmed this but the way the volumes have panned out, it seems that there may be some undercurrent to the current spike in MGT share prices. The patent which was purchased for a $200K (a 55% controlling stake), can potentially get the company $4.5 billion over the life of the patents. For a company with less than $15 million in market cap, this figure is obviously game changing. Usually, the stocks of the plaintiff companies who have filed patent infringement suits do show a spike just before the Markman hearing. MGT was expected to remain strong but range-bound till the Markman hearing in October 2013. However, the surprising breakout well before the hearing indicates that something may be brimming. A trading / investment strategy could be to buy the dips with an appropriate stop loss. At least one should ride the wave with trailing stop losses.

2.35+0.04(+1.73%)May 27 4:00 PMEDT