I am revising my stance to NEUTRAL from the previous stance of bearish for $Meta Materials Inc.(MMAT)$ .
Previously, I was bearish on the stock because it broke 2 of the support levels holding it up in its most recent run - the 200DMA and then the 100DMA.
However, in recent days, the stock has managed to reclaim several important DMAs, namely the 100DMA as well as the microterm 5DMA and 10DMA. This suggests that bullish momentum is coming into the stock, having initially found support at the charged Fibonacci level of 0.9946. I have plotted the Fibonacci retracement levels by using the swing low of 0.63 and the swing high of 2.34 from its most recent run up and they are reflected in the daily chart above.
The stock's RSI has been turning up from near-oversold levels on 27th Dec to a healthy 14-day reading of 43.69. Moreover, it is currently trading in between the lower and middle Bollinger Band.
Based on how we have closed, I am expecting a test of the 200DMA and the 1.28 level before any pullback. If we manage to reclaim this level, then I am looking towards the 50DMA and the middle BB as the next targets. It is also possible that we may backtest the 100DMA level again before a mov e higher, and that would be a good opportunity to load longs if we are able to hold that level.
So, how do we trade this? I would suggest accumulating shares of the stock for a move towards 1.28. If we manage to hold the 100DMA, then I would recommend loading from there instead. If you are playing options, I would recommend getting 1C or 1.5C at least 4-5 weeks out. You can feel free to hedge with a smaller position of 1.5P or 1P at least 4-5 weeks out, in case we fail and break below the 100DMA. Ultimately, you manage your risk - I've already given the levels to look at on the stock! Good luck everybody!
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