The past couple of days have seen long term holds and underperformers move to the forefront. Yesterday was MDVN with a 5%+ day, today it's AVNX. For those not familiar with this low cap optical related tech company, click on the link and educate yourself.
http://www.avanex.com/Aboutus/thecompany.htm
This global company achieved non-GAAP profitability last quarter and recently divested itself from France, which is allowing it to go after significant growth prospects here in the states. Restructuring is completed and now the company can add to the bottom line. Market for AVNX will grow significantly due, in big part, to video traffic on the internet and the increase that video traffic is experiencing. If you haven't figured it out yet, video, video, video is where it is at on the internet.
Volume today was 2x average and price climbed out of the box and never faltered. Not bad for a small cap on a Friday. What we see from the weekly chart below is your typical wedge consolidation that occurs after uber volatility in price movement. What is significant here is the double bottom that was formed day before yesterday. We got a 11% bounce off that bottom on fairly heavy volume, which confirms that level as solid support. This is significant because price needs to be goosed to get through the wedge - this double-bottom is exactly what will do that.The next test will be the top of the wedge, which will most likely happen next week. Then it's off to the last swing high where I hope it blows the lid off of it. I know a lot of us have been waiting and got a bit frustrated on its last push to those levels, only to falter and come back.
This is a great entry point for those that have not yet gotten in here. As can be seen from the sidebar, I have a full position so am not adding here. For newbies to the stock, you can simply place a stop below the double bottom, which is 20% away. My rule is that I exit a stock if drawdown is 25% from my initial purchase, so this is a great entry point if I was flat looking to get in.
http://www.avanex.com/Aboutus/thecompany.htm
This global company achieved non-GAAP profitability last quarter and recently divested itself from France, which is allowing it to go after significant growth prospects here in the states. Restructuring is completed and now the company can add to the bottom line. Market for AVNX will grow significantly due, in big part, to video traffic on the internet and the increase that video traffic is experiencing. If you haven't figured it out yet, video, video, video is where it is at on the internet.
Volume today was 2x average and price climbed out of the box and never faltered. Not bad for a small cap on a Friday. What we see from the weekly chart below is your typical wedge consolidation that occurs after uber volatility in price movement. What is significant here is the double bottom that was formed day before yesterday. We got a 11% bounce off that bottom on fairly heavy volume, which confirms that level as solid support. This is significant because price needs to be goosed to get through the wedge - this double-bottom is exactly what will do that.The next test will be the top of the wedge, which will most likely happen next week. Then it's off to the last swing high where I hope it blows the lid off of it. I know a lot of us have been waiting and got a bit frustrated on its last push to those levels, only to falter and come back.
This is a great entry point for those that have not yet gotten in here. As can be seen from the sidebar, I have a full position so am not adding here. For newbies to the stock, you can simply place a stop below the double bottom, which is 20% away. My rule is that I exit a stock if drawdown is 25% from my initial purchase, so this is a great entry point if I was flat looking to get in.
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