Hi Lou,
I know you did an analysis on POET some time ago. A lot has happened, and they appear to be close to a product, and they have great management in place. I was hoping you can revisit and provide your thoughts.
Thanking you in advance,
Joe
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Hey Joe,
Thanks for the assignment. This will be the third time since 2014 that I inspect the situation at POET Technologies Inc. (PTk-x). The last time was on May 28, 2014 when the shares were trading for $1.75. Elliot wanted a technical view of the stock.
The research indicated that PTK was pulling back from a 52-week high of $2.57. The shares had become overbought, and the moving average convergence divergence (MACD) and the relative strength index (RSI) had generated sell signals. It was mentioned that the uptrend line had been broken and overhead resistance should be expected at $1.80 and again at $2.
The stock pulled back to $1.50 by mid-June, 2014 and hit a low of 65 cents by November. From the November low, PTK ran to near $2 in April, 2015 which was as good as it got. The shares retested support near 65 cents by August and ran to $1.20 by October. PTK pulled back from $1.20 and built a base near 80 cents from November through December.
A re-examination of the charts will identify what 2016 has wrought.
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The three-year chart illustrates the break above the 50-day moving average that began in late December of 2015. The move saw the stock break above resistance at $1 and peak its head above the 200-day moving average on Feb. 16, closing at $1.10.
What is evident from the chart is that PTK has offered some opportunities to trade for profits for investors so inclined. The question that remains is if the most recent advance has much left in it.
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The six-month chart depicts the move from 85 cents that started in late January of 2016 and the increased volume over the last two trading days. At the moment, the MACD and the RSI are not indicating that we can expect more buying in the short term. If the stock pulls back, look to see if support near $1 holds.
Next time I will audit the case for Deutsche Bank AG (DB-N) for Tim.
Make it a profitable day and happy capitalism!
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