MagneGas Corporation volume has thinned out over the last month

Jan 27th, 2016 – Comment

Spikes and pulls back.


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MNGA LOGO

Hello Lou,

I listen to you every morning on my way to work on 640AM and have respect for your advice. Can you please let me know your thoughts on  MNGA?

I have made a significant call and would love to get your assessment.

Thanks in advance,

Syd

 

Hey Syd,

 

Thanks for the assignment and for listening to Talk Radio AM640. This will be the first time that I audit the case for MagneGas Corporation (MNGA NASDAQ). The company has developed two versions of  a green gas called MagneGas and MagneGas 2 using a patented process that converts liquid wastes into hydrogen based fuels.

These two gases are marketed as substitutes for acetylene which they market with the benefits of cutting faster and cleaner. Their second product is a co- combustion technology that adds MagneGas to other materials including coal, medical waste, and heavy oils, resulting in an extremely high flame temperature. The high temperature generates combustion improvements including a drastic reduction in carbon dioxide.

The company has a market capitalization of $48.22 million and average daily volume of 1,447,480 over the last three months. Volume has thinned out considerably since December 24, 2015 which you should add to your decision making matrix.

An inspection of the charts will add texture to my assessment.

 

 

 

MNGA

The three-year chart exhibits the characteristics of a stock that has been trading in an up channel since January of 2015 where it caught a lift off its 52-week low of $0.52. What is also evident is the tendency to spike high and then pull back and retest the lower rail of support in the channel.

The MACD and the RSI both generated buy signals in late April and late November as the shares moved aggressively higher in a short burst of buying. In late May and then in mid December the momentum indicators alerted investors that they should prepare for an increase in selling pressure.

 

 

MNGA2

The six-month chart pulls into focus the buy and sell signals generated by the MACD and the RSI in late November and mid December. What is also evident is that MNGA is currently testing support along the 200-day moving average.

What the analysis tells me is that if you want to profit from your call you might want to look for opportunities to trade this stock. The lifts have been generous on a percentage basis while the declines don’t just collapse but rather offer ample time to capture profits.

 

Next time I will probe the charts for National Bank of Canada (NA TSX) for Jane.

 

Make it a profitable day and happy capitalism!

Categories: Energy Conservation
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