We chased this a little, early in September
, thinking it was breaking out of its Cup & Handle base pattern, which is a shame because by being more patient we could have picked it up cheaper. Fortunately there’s little harm done although we have wasted some time. What has happened, as we can see on its latest 8-month chart below, is that it has stalled for time, waiting for its 200-day moving average to drop down closer to the price. When the rising 50 and falling 200-day moving averages converge, which is set to happen in 4 – 6 weeks, we will have a potent technical setup that is expected to trigger a breakout above the band of resistance at the top of the base pattern leading to a bullmarket in the stock. Two key points to make regarding this are that it won’t necessarily wait for this to happen before breaking out, and secondly we have an excellent entry point right now, after the price has dipped down close to its 50-day moving average. Upside breakout from the pattern is predicated by the strongly bullish volume pattern. The preceding bearmarket was largely on light volume, as we can see on the long-term charts in the original article on it
, but someone or something has been buying it aggressively as this base pattern has formed at a low level.
Conclusion: an upside breakout and bullmarket in this stock is only a matter of time, and not much at that, within a month or two at most. We are at an excellent entry point here after the dip of the past 2 weeks or so, so holders should stay long and it is in order to add to positions or make new purchases.
Marathon Patent website
Marathon Patent Group Inc, MARA on NASDAQ CM, closed at $0.40 on 13th October 17.
Posted at 6.30 am EDT on 16th October 17.