Quick technical update for a stock I mentioned on Twitter. A few weeks ago the stock printed a ‘Silent Alarm’ candle. Although follow through came with a delay, the implication is the same.
The ‘Silent Alarm’ pattern is simply a means to accumulate as many shares as possible while still flying under the radar before the run-up phase starts. Usually the day the stock gets accumulated on strong volume the stock closes almost where it opened or gives back almost all of its intraday gains leaving a seemingly ugly and bearish topping tail.
MVNR – Mavenir Systems has put in a complex inverted head and shoulders bottoming pattern. The stock looks like it will continue its run-up into earnings. This is obviously not a perfect set-up. Therefore conservative position sizing is advised. If the stock does react positively to earnings it will be time to add and hold for a potentially big winner in the making.
Click on MVNR chart to enlarge:
Conclusion: The reason I am bullish on MVNR is its potential to develop into a great story stock. More and more traffic will be generated by mobile devices like smartphones. VoLTE and VoWIFI plays are worth monitoring very closely. MVNR Mavenir Systems is one of the most interesting stocks in that sector I can find. Most importantly though, the technicals are now starting to support my assumptions. That’s when I initiate positions and shift my focus on managing risk.
Make sure to read MVNR’s company description from Yahoo finance in order to grasp the stock’s full potential:
Mavenir Systems, Inc. provides software-based telecommunications networking solutions. Its solutions, which are based on its mOne Convergence platform that enables mobile service providers to deliver Internet protocol (IP)-based voice, video, rich communications, and enhanced messaging services through their 2G and 3G networks, and next-generation 4G LTE networks to their subscribers in the United States and internationally. The company offers various voice and video products, including telephony application servers that provide voice, video, and supplementary services through broadband IP networks; voice over LTE interworking function products, which enables voice and SMS services in next-generation LTE networks; media resource function, a media processing engine; mobility application servers; call session control function products that provide subscriber and session management services; equipment identity register that allows operators to control access to mobile networks, deterring device theft and fraud, and enables provisioning of optimized services; and unified access gateway, a multi-application solution to authenticate end-user access to the converged services network. It also provides enhanced messaging products comprising Rich Messaging Server, a flexible IP messaging application server; messaging routers and gateways; presence and resource list servers; and XML document management system, a database system that supports the management and storage of user-generated content. The company sells its products directly, as well as through channel partners and system integrators. Mavenir Systems, Inc. was founded in 2005 and is headquartered in Richardson, Texas.
Hold your strongest stocks the longest and sell stocks that stop moving up or are acting sluggish quickly. Remember, stocks are only good when they are moving up. – Dan Zanger
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