PTOTF Stock: Geared Toward Higher Stock Prices
October was a terrible month for stocks. The major market indices were caught in violent correction during this month and I could not be happier to see it finally come to a close.
We have now entered the November, and I can finally breathe a sigh of relief. This month usually marks the beginning of a strong period for the stock market as stocks tend to appreciate and outperform going into year-end.
The only positive aspect that I can point to during the painful October correction is that I was able to single out stocks that showed signs of inherent strength with much greater ease. There were only a handful of stocks that were able to stand tall when the selling pressure was engulfing the stock market.
Patriot One Technologies Inc (OTCMKTS:PTOTF, CVE:PAT), was one of the stocks able to brush off the selling pressure and push higher in the turbulent market conditions. This was an incredible show of strength. The good news I have to share is that I believe Patriot One stock is poised for further gains.
These beliefs are based on a number of technical signals, which have been highlighted on the following PTOTF stock chart.
Chart courtesy of StockCharts.com
This stock chart highlights a technical price pattern known as an ascending channel and an influential momentum indicator known as the moving average convergence/divergence (MACD) indicator.
An ascending channel is a technical price pattern that is defined by its price action. It contains a series of higher highs and higher lows, which is also the quintessential characteristic that defines all bullish trends.
The factor that sets this pattern apart from a conventional bullish trend is the two upward-sloping parallel trend lines that were created using the peaks and troughs produced by the price action.
These trend lines are significant because they capture the ascending channel by defining its parameters. This information is of the utmost importance because as long as Patriot One stock is contained within these trend lines, I can only assume that a bullish trend remains in development and, therefore, higher PTOTF stock prices will prevail over time.
The most recent test of price support occurred in June 2018. Since that successful test, higher Patriot One stock prices have prevailed. It is only fair to assume that resistance outlined by the ascending channel is likely to be tested next.
This idea that resistance is likely to be tested next is being reinforced by the MACD indicator.
To clarify, MACD is a very influential momentum indicator that distinguishes whether bullish or bearish momentum is influencing the price action in a stock. A bullish momentum signal implies that a stock is likely to appreciate, while a bearish momentum signal implies that a stock is likely to depreciate.
The reason why I say this indicator is so influential is because a stock cannot sustain a move in either an upward or downward direction unless the applicable level of momentum is supporting it.
For example, while the MACD signal lines were in bullish alignment, the stock price made an advance toward higher Patriot One stock prices. While the signal lines were in bearish alignment, Patriot One refrained from advancing and corrected toward lower prices instead.
A bullish MACD cross was generated in July and continues to suggest that PTOTF stock is geared toward higher prices. It is why I believe that PTOTF stock is poised to appreciate.
This notion, that the stock price is likely to continue its advance, is also being supported by a wave structure that has been in development since Patriot One stock bottomed in late June.
This wave structure is captured on the following PTOTF stock chart.
Chart courtesy of StockCharts.com
This Patriot One stock chart highlights a wave structure consisting of impulse waves and consolidation waves.
The impulse waves are highlighted in green on the chart above. These waves capture the stage in a bullish trend when a stock stages a sustained move toward higher prices. The consolidation waves are highlighted in purple. These waves capture the stage in a bullish trend when a stock takes a step back and corrects.
These waves feed off each other, creating the necessary conditions for a bullish trend to flourish. Since June 25, these waves have been responsible for taking PTOTF stock from a low of $0.93 to where it currently resides at $1.93.
An impulse wave has just been completed and another consolidation is now in development. This wave will create the necessary conditions so another impulse wave can follow.
The combination of this wave structure and a bullish MACD signal are suggesting that resistance is likely to be tested in the not-too-distant future. Resistance currently resides at $3.30, but because resistance is ear-marked by an upward-sloping trend line, the longer it takes to get there, the higher this objective becomes.
I believe Patriot One stock is poised for further gains. The reason being is that there are a number of technical indications suggesting that PTOTF stock is currently geared toward higher prices. The stock’s ability to appreciate in October, as the market corrected, is a testament to this.