While it may be melodramatic to say my following of Liquidmetal Technologies Inc. (OTCBB:LQMT) has been something of a 'saga', it wouldn't be unfair to say it's one of those small cap stocks that's had its fair share of twists and turns. Yours truly turned explicitly bullish on LQMT back on November 22nd, after the stock broke above a key falling resistance lines. Then, on January 14th, I made a point of saying the rally had run its course, and it was time to lock in your 47% gain on Liquidmetal Technologies and walk away... at least for a while.
So why look at it again now? Well, in simplest terms, that 'while' is up. It's time to wade back in, as this is once again one of the market's better-looking small cap stocks.
In retrospect, the decision to shed LQMT in mid-January was premature. The stock closed at 23 cents that day, but ended up hitting a high of 40 cents a week and a half later. Ouch. On the other hand, it would have taken unlikely precision to get out of Liquidmetal Technologies at that maximum profit, because it didn't last more than a few minutes. In fact, the bulls ended up turning tail and running the next day, kick-starting a move all the way back to a low of 18 cents in the middle of last week.... which is why it's worth revisiting now.
In the same sense that the January 27th peak was a one-day wonder, the February 12th plunge may have exhausted all the potential selling, setting up a trade-worthy bullish swing. And sure enough, the bullish floodgates were opened two trading days later, confirming the tide had turned. Specifically, on Friday of last week, LQMT popped in a big way, and did so on the highest volume we've seen in months. That's a huge and not-often seen clue within the world of small cap stocks.
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It's also constructive that Liquidmetal made the reversal effort right at the key 100-day moving average line (gray), and very near the 20 cent-mark, which was a key ceiling back in November; ceilings have a way of becoming floors later on, and vice versa.
Bottom line? The bulls ARE interested again. Of this there can be no doubt. Given the chart's history, now that the bulls are interested again - perhaps more so than they've been in years - this new rally should get lots of traction.
Yes, Liquidmetal Technologies shares have peeled back from their high today, but that could have been expected after the bullish opening gap. In fact, it may be a good thing, in that the quick pullback burned off any overbought pressure before it had time to build up... one of the key headaches small cap stocks are known for.
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