PTOTF Stock: No Overhead Resistance to Contain the Stock Price from Advancing
Stocks are all the rage, and the fear of missing out is causing retail investors to flock to the stock market. The move toward higher stock prices is relentlessness, and the selloffs are short-lived. This market is red-hot.
A red-hot stock market is fueled by red-hot investments, and I have stumbled upon an incredible technology company in Patriot One Technologies Inc (OTCMKTS: PTOTF). The company has a revolutionary application that has the potential to make the world a much safer place.
Their application is designed to prevent active threats, and it does this by using radar technology to detect concealed weapons, such as knives and guns, on moving objects. This technology can be used on multiple spectrum and platforms, In today’s world, such precautionary measures are needed in order to safeguard the lives of the public.
This concept and technology may sound like reason enough to believe that higher Patriot One stock prices are likely, but that is not the main reason I am focusing on PTOTF stock.
I judge the merits of an investment by analyzing a company’s stock chart. The technical price pattern that was just completed on the PTOTF stock chart is all the reason I need to believe that a spectacular move toward higher prices is now in development.
The completed technical price pattern I am referring to is illustrated on the following Patriot One stock chart.
Chart courtesy of StockCharts.com
This PTOTF stock chart illustrates a technical price pattern known as a “cup and handle.”
A cup and handle price pattern is created because a significant level of price resistance prevents the stock price from advancing beyond it. In this case, the level of price resistance, which resided at $1.50, was established right after Patriot One stock starting trading.
This inability to move beyond a level of price resistance, and the process of testing it from underneath, resulted in the creation of two distinct troughs. The first trough is much larger than the second, and these troughs are what characterize a cup and handle price pattern.
This pattern was completed on January 26, when PTOTF stock closed above resistance. The completed cup and handle pattern implies that higher prices are now on the horizon. The great thing about technical price patterns like cup and handle patterns is that, not only do they imply what direction a stock is heading in, they can be used to generate a potential price objective.
Generating a price of objective using the cup and handle price pattern is as easy as taking the depth of the cup, which is $1.02, and extrapolating that value above the significant level of price resistance, which resided at $1.50. This generates a potential price objective of $2.52 for Patriot One stock, which represents a potential return of 32.6% from current prices.
I have the inclination to believe that much higher Patriot One stock prices are likely, beyond the price objective suggested by the completed price pattern. This view is based on the notion that the level of resistance that was responsible in creating the cup and handle pattern was also the previous all-time high.
Breaking above a previous all-time high that was establish shortly after a company begins trading is a very bullish characteristic that is shared among some of the best-performing stocks. Facebook Inc (NASDAQ: FB) and Shopify Inc (NYSE: SHOP) are prime examples of this.
This characteristic creates a dynamic in which there is no overheard resistance to contain the stock price from advancing, which means there is no limit to how high the stock price can travel.
This dynamic is magnified by the notion that anyone who is holding a bearish short position is underwater on that position and, as the stock price rises, their inclination to exit and cover that position increases. This comes at a time when new all-time highs have a tendency to attract a breed of investors called “momentum investors,” who thrive on chasing performance.
Given this current bullish state of the market, the demand created by the momentum investors, who are chasing performance, and the bearish investors, who are covering their short positions, creates an imbalance between the demand and supply of PTOTF stock. This is the exact type of environment where explosive moves to the upside are created.
I am bullish on Patriot One Technologies because the completed technical price pattern on the Patriot One stock chart implies that much higher PTOTF stock prices are on the horizon.