wiley murray:
Microforum seems a strong speculative play right now for many reasons. The last three trading days have seen large increases in volume and a move from an intraday low earlier in the week of under 1.20 (CAN) to end the week at $1.52. As to why, there are several possibilities. For example, from stockhouse.com (published Friday:
>>> Microforum [MCF:TSE]
-- Radio Interview Sparks Breakout?
MCF surprised even those close to the company this afternoon when trading suddenly broke out of its recent tight range in the high $1.20's. The shares closed at $1.53, up $0.25, after briefly touching $1.60. Volume was a robust 1.3 million. A specific fundamental reason for the surge is difficult to pinpoint. Instead, this may just be a
case where the technical trading forces finally caused a break out. In simple terms, the float available at a certain price finally dried up, and when some buying pressure came in looking for stock, the price had to move up.
A cause for the renewed buying interest is easier to suggest. First, we are still expecting an announcement about MCF's next deal with a widely recognized name-brand company, and investors could be speculating over the timing of that news release. Alternately, we understand MCF CEO, Howard Pearl, was featured today on "The
Friday Market Monitor with Walter Traversy", a radio program aired on CFRA Business Radio in eastern Canada. It is possible that buying from the audience of the show was enough to trip the demand/supply balance
in MCF's favor.<<
Also from stockhouse:
>>Jan. 11
Institutionally Recommended by:
Canaccord Capital 12 month price target of $3.00
Revenue Growth Background:
Microforum has shown excellent revenue growth in fiscal 1998. Q1 results which ended in May 31
posted a 310% revenue increase, Q2 which ended on August 31 posted another record revenue
increase of 576% or over $6 million.
The much anticipated Q3 results should be released sometime this month. If the results continue to
confirm a revenue growth trend, it is reasonable to assume that the share price should set a new higher
support level.
Technical Recap:
The Exponential Moving Average is still steadily moving up which shows a good upward price trend. The
MACD is also turning into a buy signal. Our technical buy range last week was between $1 and $1.10
but the price jumped away from us on Monday and reached a high of $1.38 on Thursday.
The price has now pulled back again $1.26 cent range. I will be looking to add a partial (1/2) position to
the TTB at $1.29 or less on Monday.
Fundamentally, more contract announcements could be made soon not to mention the all important Q3
results.
Technical Trading Board:
Technical Strategies shown are for example and study purposes and do not represent an offer to buy or
sell securities. See Disclaimer. For example purposes, buy and sell prices will be based on the closing
price of the day it was reviewed or if the target buy or sell price was reached.
Symbol/Exc. Date Buy/Sell Shares Price Cost Sold P/L
MCF/TSE O1/11 Buy (1/2)500 $1.29 or less <<<
I also like this stock as a contrarian play, with it much more than 50% below its 52-week high of over $4 and the recent appointment of a new president and CEO (in Nov., I think). Also, as a short-term play, many daytraders who contributed to BII recently peaking at $9.90, now settled down at about $7, are starting to show interest in MCF as its volume picks up. I expect somewhat of a shift from BII to MCF, which will increase volatility and and create an opportunity for very short term trading. This is not to discount the longer term potential, however.
Interested investors should check out stockhouse's research report on MCF, in which they predict explosive growth in the next six to 18 months. Of course, what they say is not gospel, but they say:
"Altogether,this could become one highly emotional speculative play as we head into the New Year. This may become one of The Insider Report's most successful discoveries and could rank among the early candidates of Stock-of-the Year for 1999. We couldn't squeeze into this column all the reasons why MCF might become the "stock of choice" for Internet speculators, so we wrote a special Research Report that details many of the reasons why we believe MCF could duplicate the recent success of Bid.com."
Please don't take my word for it; I'm not an expert. Look a little deeper and if you like what you see, come along for the ride.
Happy Trading!
Adamson |
