Though today's market-wide gain is still a question mark in my view, a handful of small and micro cap stocks are far enough off the main radar that they could continue upward even if the broad market pulls back. Those names include Mexoro Minerals Limited (OTC:MXOM), Cavitation Technologies, Inc. (OTC:CVAT), and Magma Design Automation, Inc. (NASDAQ:LAVA). Here's a detailed look at each.
My biggest concern with
Magma Design Automation, Inc. (NASDAQ:LAVA) is the possibility that it could find resistance at a known resistance line. The reason I bring it up anyway is the possibility that it could punch though that resistance line.
That line is the up per of the two blue lines framing Magma Design Automation. The stock didn't push off the lower one before making today's 5% leap. That may be a bad sign, suggesting the breakout is unfounded. I view it as a positive for LAVA though, suggesting the market's ready to take the stock to higher levels already. The lack of volume nags at the theory though.
The move from the current price of $2.31 to resistance at 2.65, however, would be a big enough move to generate a bit of a profit cushion for Magma Design Automation shares. If LAVA is indeed destined to pullback from there, you'll have enough room to make an exit with a tiny profit. Yet, you'll be positioned for the bigger move higher.
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Though I think
Mexoro Minerals Limited (OTC:MXOM) is overbought in the short run (on a daily chart), a quick glance at the weekly chart shows a very impressive - even if slow - uptrend.
I suspect the key here was the ceiling at $0.42. Traders wanted to first see if Mexoro Minerals Limited could make it past that Q2 high. Well, MXOM did indeed clear that hurdle, and appears to now be gaining momentum with a little volume behind the move.
As for a target, I can see any that has any real meaning for Mexoro Minerals. I suppose late year's peak above $1.50 is a decent place to start, though frankly, I don't know if the company's results can actually support a price like that yet. Play it by ear.
Trading is still very thin with Mexoro Minerals Limited, however, so tread lightly.
Finally,
Cavitation Technologies, Inc. (OTC:CVAT) seems to be in a longer-term uptrend now, despite what today's bar may look like.
Today (Monday) is likely to be misleading. Yes, Cavitation Technologies opened much higher and spent the rest of the day tumbling, and yes, the volume was through the roof for CVAT, indicating the would-be sellers jumped at their first profit-taking opportunity. The stock and its uptrend still survived the dip though.
Take a look at the bar from October 29th... the day CVAT opened at $0.61 and spend the rest of the day falling back. Two days later, Cavitation Technologies were moving higher again. I've got a sneaking suspicion today was just a wash-and-rinse day, and the slate is cleaned for more upward pressure. The bowl-shaped chart is just too compelling to ignore.
If you'd like to know of any changes in our opinion of CVAT, LAVA, or MXOM (or if we officially recommend them as trades), be sure to sign up for our free newsletter today. It's delivered weekly.
