- Microvision (MVIS) is the king for retail traders.
- MVIS exhibiting huge volatility and price spikes.
- Microvision shares closed down 24% on Tuesday.
Microvision is a Washington-based technology company making sensors and microdisplays. The primary business is developing laser beam scanning technology. The company has a market cap of $3.2 billion and a high short interest of 20%. Sound familiar?
MVIS stock news
MVIS shares have captured the retail zeitgeist and are in line to dethrone GameStop as the retail tool of choice for speculative volatility. MVIS has been the top trending stock on r/WallStreetBets this week, and with price swings like this, it is easy to see why. MVIS shares are up 274% in 2021. MVIS is up 94% in the last week, 726% in the last 6 months, and wait for it, 7,909% in the last year. Nice if you can buy at the bottom and sell at the top.
All this meets the r/WallStreetBets criteria of highly volatile, highly speculative stocks. Most seasoned investors shy away from such volatility, preferring more sustainable, identifiable businesses. But then older is always more cautious. The new breed of young trader wants volatility, wants action even if that can spell disaster as well as profits. Hey, it is their party.
MVIS has overtaken GameStop on r/WallStreetBets this week with 2,451 mentions against GameStop's 918, according to data from Quiver Quantitative. This is despite GameStop (GME) not exactly going along quietly as it produced some pretty serious price moves also this week.
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Quiver Quantitative
Just to give some perspective on the hype, this is as per usual not a profitable company. MVIS lost $13.6 million in 2020, $26.4 million in 2019, $27 million in 2018, $25 million in 2017 and $16 million in 2016. The company has been raising cash and diluting existing shareholders as it does so with the share count increasing nearly 50% in the last three years.
So if you choose to invest in this, just know what you are getting into. This is a speculative hype and frenzy for the short term. That is not a problem, since volatility provides opportunity so long as you manage your risk accordingly.
So let us look at the chart from some key levels to help manage risk and trade the volatility.
Price is elevated, and so is volatility. The huge breakout has immediately been slammed by an ugly bearish engulfing candle. The Relative Strength Index (RSI) is very close to overbought levels and was above overbought levels on Tuesday. The Williams oscillator is also showing close to overobught levels. The Moving Average Convergence Divergence (MACD) indicator has crossed over into a bullish signal, which had to happen given the price explosion.
$19.25 is a key support as above this MVIS remains bullish. This is where the price has broken out from and gapped up. Tuesday also saw MVIS just about stall on the way back down, bottoming out at $19.19. A break of this will see a quick move to the 9-day moving average support at $16.85 and then the 21-day at $15.28.
The first target to the upside is $28 and then $30.
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