Sunday Musings
No one else has posted and, at the strong risk of appearing/being foolish, I'll post my random thoughts on MRVC's chart.
Friday was very, very strong and it's hard for me to imagine the stock - at least intra-day - not trading quite a bit higher. (And this, I have to admit, is contrary to what I expected intraday when I saw 2 large blocks go off at the bid.) First, liberally construed, we had a gap up, or window, on Friday. Thurs we closed at 12 1/2 and opened Friday at 12 7/8. (Strict constructionists would look at the fact that we touched 13 briefly on Thurs and say, no gap.) Japanese candlestick devotees say that if in the following 3 trading days the window is not closed, then that window or gap becomes strong support. Personally, I feel strongly that the window will not close and that therefore MRVC now has a strong floor at 12 1/2. Acting on that, I will sell some uncovered May 12 1/2 puts tomorrow.
Second, on Friday we had volume of 1.76 million shares, not a record, but to me a solid indication that we are in a strong uptrend that continues.
Third, we closed at 14 1/16, very near the high of 14 1/4. Not quite a marubozu(very positive) but close.
So all in all, everything looks great regardless of news.
One note of caution. The Japanese believe that in terms of consecutive new highs (measured intraday, not from the close) that there is magic to the numbers 8 to 10. In other words, that very few stocks run up for more than 8 to 10 days of new highs, measured from the low and not counting small corrections and lateral days, without some sort of correction.
MRVC hit a low of 5 7/8 on April 7th. April 8 we closed up a fraction at 6 1/4 (I believe) and this would count as day "1". If the count has not been interrrupted - the system starts the count over under certain circumstances which I'll get to in a moment - then last Friday was day "9". The count is considered interrupted if there is a clear break in the trend or if there are more than several "lateral days." On and after April 15, we had 4 to 5 lateral days before MRVC had a new high. If the count started over, then we may be only at day "6".
Like I said, this probably sounds foolish to many/most/all of you, but it's good to keep in mind that no stock goes up continously without a break. Tomorrow, the company will probably annouce the China deal and the stock will soar to 17.
Of course, long term, 14 -15 will seem piteously low.
Bruce |
