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Meta Materials go BRRRR! A technical analysis

TLDR: Meta Materials inc go BRRR

Short interest high, momentum going up. High conviction entry.

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https://preview.redd.it/4e5m8416etk71.jpg?width=1579&format=pjpg&auto=webp&s=cdc44d3de0a7f1b6c562020aa56528c1513ad711

We are looking at the 1 day chart below and 2 indicators. The yellow indicator is RSI with a divergence line rather than overbought and oversold lines. The blue indicator is on balance volume.

Drawing a horizontal line on both indicators on where they closed today you can see the last time that daily RSI or obv has been this high was the last run up to $22 with the reverse merger dividend speculation.

OBV has only been this high since the very tippy top of the peak. (this indicates that while price has been driven down the volume of the red days is being outweighed by the volume of the green days. This means that people have diamond hands. The idea of OBV is that price movements with low volume are much less significant than the same price movement on high volume.

RSI: Last time RSI closed at this level on the uptrend (61.85) was on may 28th. May 28th had a closing price almost identical of our closing price today. This day also marked the beginning of the runup to $22.

we have a closing price and RSI to match the beginning of the runup however our OBV is already as high as it was at the peak…. this indicates to me that we have a very likely probability that this run up will be more violent and has more power behind it than the previous run up.

This is the sort of technical analysis that many professional traders would use to enter what they would call a high conviction trade setup. Most would enter here with a price target of $22 and a stop loss of $3.70 and never look again until the either the price target or stop loss was reached.

lastly the candlestick pattern is bullish as hell. we have a bullish engulfing on friday, monday met with high resistance and insane volume, my guess is market makers delta hedged their $5 calls they have sold and proceded to short the price immediately after. Today leaves us a bullish hammer.

I think we will see a few high volume days met with quite a bit of short fire power but it should be obvious as to the direction of the price. No one can be sure but because of the monday volume i would guess the $5,$6 calls have been delta hedged at this point therefore we likely wont breakout completely until we push over $8 with volume. $8 strike calls has a ton of open interest and i highly doubt those calls have been hedged.

Im betting now, we see a price real close to $8 by end of the week and next week we breakout.

What do you think?

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25 Comments

  1. From the shareholder letter:

    META **delivers previously unachievable performance**, across a range of applications, by inventing, designing, developing, and manufacturing sustainable, highly functional smart materials. Our technology platform encompasses three core capabilities, holography, lithography, and wireless sensing, and is software and AI-design driven. This allows us to develop a library of solutions and functional prototypes much **faster and at lower cost** than traditional chemical synthesis. We enable leading global brands to deliver breakthrough products to customers in consumer electronics, 5G communications, health and wellness, aerospace, automotive, and clean energy.

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