One of the top mentions in Reddit’s WallStreetBets over the past few days, MVST nearly in just a week.
But that’s not the full story.
Remember the move in NSAV?
A blow off top into a full reset. Well, it’s beginning to rebound from the insane move.
The MVST top looks a lot like that…(you’ll see what I mean)
And with the stock off more than 30% from its high, I’m looking for the next support levels and what could happen next.
Microvast Holdings, Inc. (MVST)
Microvast Holdings (MVST) is a technology innovator that designs, develops and manufactures lithium-ion battery solutions. Microvast is renowned for its cutting-edge cell technology and its vertical integration capabilities. By integrating the process from raw material to system assembly, Microvast has developed a family of products covering a broad breadth of market applications.
“Vision: As we drive for higher energy densities, we focus on three underlining battery features: fast charging, long life and design for safety.”
This company just hit the Nasdaq on July 26 through a SPAC merger…and you can see in the chart below, the stock traded down from just under $10 to a low of $7.83 last Wednesday, August 4.
Not the greatest debut.
And then, MVST nearly doubled in price over the course of a week.
So what gives?
When you look at the website, there are only two pieces of news out recently. One being the merger on July 26.
The second being a press release that piques some interest.
Two days after MVST began trading on the Nasdaq, the company announced that it will be joining forces with eVersum, a privately held OEM of electric city buses, mid-size shuttles and on-road & off-road electric trains, to develop state-of-the-art battery solutions to electrify the current and future lines of eVersum’s purpose-built, purely “eBorn,” electric vehicles.
Get the details in the press release here…
Long story short…
- Top-notch battery solutions for eVersum next-gen electric commercial vehicle
- Potential supply volume forecast of over 100 million €
Back to the chart:
Volume popped up on the 29th and the stock hit a high of $9.77 hitting resistance at the level it began trading on the Nasdaq.
After heading down, the stock hit a low of $7.83 last Wednesday before ending higher on the day, leading into a breakout on Thursday.
When MVST broke above the range it blasted off hitting a high of nearly $16 Tuesday morning.
Look at that volume on the breakout. This was a classic consolidation breakout setup.
After blowing the top off Tuesday morning, MVST traded back down to $13.12 where it closed for the day.
The selloff continued yesterday with MVST hitting a low of 11.05 and closing the day at 11.88, just below the 50 day MA.
The 11.05 price was the low of the day the stock gapped up from the consolidation breakout.
Support at this level could help push the stock back above the 50 day where I would look for continued consolidation.
While it did bounce there intraday yesterday, right back to the 50 day…it still closed under the 50 day.
And this morning MVST gapped down and broke below 11.05, currently (at time of writing) trading at 10.80.
If it can’t get back above 11.05 today, I’ll be watching the 20 day and the breakout point around $10 to see if it can hold above the range where the move first started.
If it can hold above there, I’ll look for a consolidation/ pause and move back up.
However, if it falls back into the original 8-10 range, it’s a total reset like we saw in NSAV below.
And exactly why I sell into the moves up…see the NSAV trade that had me out before it plummeted.
As a stock with high interest on Reddit, even with the big move down, MVST will still be on watch. Just as NSAV reset before making a bounce off the 200 day, anything can happen.
The key is to wait for signs. I can’t stress that enough. If the stock breaks below these key levels, there’s nothing to do.
It’s that simple. I don’t look to buy stocks that are cratering into the abyss after a big move up.
I wait for support levels or consolidation patterns to form and confirmation of a breakout before making a new trade.
