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MGT Capital Investments, Inc. Message Board

  • investora2z investora2z Apr 19, 2013 7:14 AM Flag

    Supports should hold

    Recently, the volumes have been high when the stock rises, and they have been low when it has fallen. This indicates lack of downward momentum. $3.90 (200 DMA) provided support yesterday in the low volume trade (191K). If the 200 DMA can hold for a few days, even with lower volumes, it would imply that the stock may be entering a phase of consolidation. In fact, it will be good if it takes a breather for a while to make a base before it can challenge the next levels. The recent high of $4.25 and then $4.70 will be the next resistances. On the downside, the 200 DMA / 50 DMA ($3.27) should provide very strong support. Remember, the stock spent a lot of time below the 50 DMA before breaking out. So that consolidation is most probably going to act as a good base. One can hold or even add with a stop loss. However, the volatility is likely to increase or decrease with volumes, so one should always keep an eye on that metric. People who know about the undercurrent to the current spurt may be nibbling away. The upcoming Markman hearing and the inherent potential of this big lawsuit against casino gaming companies should keep the stock buoyant over the next few months. This appears to be a good opportunity to ride the momentum. For a small company, a $150-$300 million upfront settlement will obviously be game changing. The lower end of the range regarding estimated value of the lawsuit was $300 million over the life of the patent. Thus an upfront payment would obviously be more “time valuable” and reduce uncertainties. Of course, the management knows better about the prospects, and hopefully they will do what is best in the interest of investors. Let us first see how the technical supports hold.

0.31+0.08(+31.91%)Feb 12 4:00 PMEST