Mechanical Technology

MKTY

Company. "Currently, MTI is involved in the field of micro fuel cells through its subsidiary MTI MicroFuel Cells Inc. (MTI Micro) and in the field of non-contact precision instrumentation through its subsidiary MTI Instruments Inc. (MTII)

"MTI Micro is developing it’s Mobion™ technology for a wide range of portable electronic devices and is targeting 2004 for the launch of its first micro fuel cell product.

"MTI Instruments develops, manufactures and sells high quality precision measurement and testing systems for use in a variety of industries worldwide. MTII's three product lines include jet engine balancing and vibration analysis systems, wafer metrology systems and a range of non-contact sensing systems that use fiber optic, laser and capacitive technologies to make nano-accuracy measurements in product design and quality control processes." (company website)

Buy. MKTY surfaced in screens for bullish breakouts with volume and for price/volume explosions. MKTY had been trading in a narrow range for a few weeks, causing the Bollinger bands to narrow (red arrows); it broke to the upside this week with a solid jump on high volume yesterday and another one today. It is now trading about where it was before the last big dip (see sidebar).

With yesterday's jump, the trend (black ADX line) reached critical strength accompanied by a sharp rise in buying pressure (green +DI line). While it consolidated, MKTY became oversold, but the last two days have taken care of that, and relative strength has taken a jump.

Sell

14-Feb-05. The peak at the end of December turned out to be a false alarm. I held on after the beginning of the year because MKTY was hovering right around the 50-day moving average which was flat. But instead of breaking out above the average, MKTY collapsed.

What I really don't understand is why the collapse was preceded by an influx of money into the stock (CMF). Were a bunch of other people fooled, too?