PTOTF Stock: A Hidden Gem
The global market indices are in peril. Nothing captures this notion better than the fact that December, which is seasonally a positive month, is on pace to be the worst-performing December since the Great Depression.
Investors are clearly concerned about the prospects of the economy going forward, which is why they have decided to exit stocks at an alarming pace.
Looking at things from a “glass half full” perspective, the selling pressure that is currently inundating the market indices is creating numerous opportunities. The reason I say this is because as sell-offs progress, the selling eventually reaches a climax where the selling of stocks becomes indiscriminate. This is where references like “the baby gets thrown out with the bathwater” come into play, as the fear of losing money causes investors to exit all stocks.
For instance, I am quite fond of Patriot One Technologies Inc (OTCMKTS:PTOTF, CVE:PAT) stock. I would have to rank it among my favorite stocks for 2019. This company is in the process of commercializing a revolutionary weapon detection system called “PATSCAN.”
PATSCAN uses radar technology to discreetly scan for concealed weapons like guns, knives, and even bombs. Aside from making deals with a defense contractor and Cisco Systems, Inc. (NASDAQ:CSCO), which substantiates its product, Patriot One has also just rolled out paid trials and secured its first contract in the process.
This is all great news. As of October 24, Patriot One stock had rewarded investors and was up 120.63% on the year. Unfortunately, this is where the good news surrounding the stock price ended. Since that fateful day, Patriot One stock has corrected by 34.26% as the market selling pressure drove the share price lower.
The PTOTF stock price currently resides at around $1.30. The good news is that despite this sell-off, the overall bullish trend is still intact. The bad news is that PTOTF stock is sitting in a precarious position, as it is testing important and influential levels of price support.
This first level of price support is highlighted on the following Patriot One stock chart.
Chart courtesy of StockCharts.com
This PTOTF stock chart illustrates that, at the moment, the 200-day moving average is being tested.
The 200-day moving average is a popular metric that investors use as an indicator to determine whether a stock is in a bullish state or a bearish state.
Deciphering between these two polar opposites is as easy as determining which side of the 200-day moving average the stock is trading on. Trading above it suggests that the stock is in a bullish state and therefore likely to appreciate. Trading below it, on the other hand, suggests that the stock is in a bearish state and therefore likely to depreciate.
The 200-day moving average has become such a popular metric over the years that it has become a significant inflection point. As a result, it has a habit of acting as a significant level of price support in bull markets and a significant level of price resistance in bear markets.
As you can see on the chart above, Patriot One stock broke above the 200-day moving average on July 31. Ever since then, it has been using this metric as a significant level of price support.
At the moment, Patriot One stock is testing this level of price support. In order to maintain its bullish state, PTOTF stock needs to maintain its footing above it.
Falling below this moving average would put the stock in a bit of a precarious position because just beneath the 200-day moving average lies an extremely important metric that has defined the bullish trend in PTOTF stock.
This metric is captured on the following Patriot One stock chart.
Chart courtesy of StockCharts.com
This Patriot One stock chart captures a bullish trend composed of a series of higher highs and higher lows that have been in development since fall 2017.
By connecting the series of higher highs and higher lows using trend lines, I have created an ascending channel. This pattern captures the bullish trend that has been in development and implies that, with the passage of time, higher PTOTF stock prices are expected to follow.
Support outlined by this pattern is fast approaching, and in order to maintain the implications suggested by this pattern, Patriot One stock needs to maintain its footing above it.
As long as the selling pressure does not intensify, I speculate that the PTOTF stock price will likely find its footing around these levels. If I use last year as a precursor, where Patriot One stock bottomed in December and then staged a move toward higher prices, then perhaps a similar outcome can be expected to happen soon.
I believe that the selling pressure that has inundated the markets has created an opportunity for those interested in Patriot One stock. This stock is among my favorites going into next year. I fully believe that the future is bright for this company and that PTOTF stock investors will eventually be rewarded.