Disclaimer: MGT was our FOCUS Pick on 6/15. Pro Member were alerted at $2.60.
The MGT Story....So Far
The MGT story started on May 9th, 2016 when USA Today and Fortune magazine announced that John McAfee would take over as CEO and would lead MGT Capital Investments and even rename the company John McAfee Global Technologies.
John McAfee is a pioneer in virus scanning technology and at his peak was worth more than $100 million. He was the creator of the McAfee virus protection software which was later sold to Intel and is now Intel Security. The announcement of McAfee joining MGT sparked a surge of buying that would drive the stock from $.42 on May 9th to almost $6 by May 18th.
Due to the float size and stock price anytime a penny stock makes the front page of USA Today or Fortune magazine there is going to be a flurry of activity around it. However, the initial hype can only propel a stock for a certain amount of time before reality, and gravity set in. MGT pulled back over 60% after its initial run to $6 as investors went short and also took profits. In most cases of over-inflated penny stocks this 60% pullback would have been the start of the end for the stock. We would typically see the stock drift back down to penny land and end up even lower than it was when the whole thing started.
MGT was different. The stock found support at the $2.50 area and traded sideways for over 2 weeks while traders attempted to figure out if this John McAfee news was legit or just hype. During that 2 week time frame a lot of traders went short as well. This sideways trading was like a coil winding up getting ready to spring. We saw the sideways motion start to curl up which is a good indicator that the spring is about to get sprung and we chose MGT as our FOCUS Pick before the open on 6/15. MGT was being traded in our chat room the whole way up, but we reserve FOCUS Picks for longer term and more steady trades. MGT popped over 30% on 6/15 and has been trending higher since then. The stock is now trading at $4.29 on the way to retesting the $5.58 recent high.
It seems that MGT has some staying power and if it is able to break out over its recent high of $5.58 it could move a lot higher.
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