Just when you think it can't get any better for Wave Systems Corp. (NASDAQ:WAVX), it gets better. WAVX is turning out to be one of those rare cases where the higher the stock goes, the easier it gets for it to go higher.
If the ticker rings a bell, it might be because yours truly penned some bullish thoughts on WAVX back on March 5th, following up on May 5th when it finally got the traction it was supposed to be getting following the March 5th write-up. The May 19th commentary on Wave Systems noted how the rally was knocking down even more ceilings, while shares have pushed past another big resistance level today. The surge today, in fact, puts the stock within reach of the last of the major hurdles that was holding Wave Systems Corp. down.
The daily chart tells part of the story. After a cross above all of its key moving average lines in April and a successful retest/confirmation of that move in early May, WAVX has been on a roll. The ceiling at $2.00 was breached once a week ago, and today's move has pushed Wave Systems past that big resistance level again. The bullishness has also unfurled on rising volume too. That's a huge progress, and yes, the market is noticing.
While the ball is already rolling, it should be noted there's still a way the bears could stop - even if just temporarily - the unfurling rally from WAVX. There's a minor support level at $2.40 that could be converted to resistance in a pinch. It wouldn't be a very strong ceiling, however, and given the momentum in place already it wouldn't take much for Wave Systems Corp. to push through that mark and continue its quest for the bigger ceiling all the way up to the $4.00 area. And yes, that's a prediction (though one that's going to be kept on a short leash).
Make no mistake - this is all a psychological chess match, designed to capitalize on the oddities and often illogical tendencies of traders to chase a trend, creating the very rally they hope they don't miss any more of. That doesn't mean there's no money to be made in the insanity, though.
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