As tons of market eyes are on Gamestop (GME), BlackBerry (BB), and Beyond Meat (BYND), some small caps are also making incredible moves that warrant our attention. Especially if you are a reader of Equity Guru’s Market Moment, where I have nailed BlackBerry and now, the stock for today’s discussion, Manganese X (MN.V). Manganese X made an incredible move of 59.57% with over 17.7 million shares traded, and the momentum continues today. Today’s price action saw Manganese X up over 20% at one time, but has now pulled back at time of writing. The stock is still up 9% for the day with over 3 million shares traded.
The recent fundamental news on Manganese X was about a warrant listing:
Manganese X Energy Corp. is pleased to announce that effective at the opening of market on January 20, 2021, 24,749,145 common share purchase warrants (the “Warrants”) will commence trading on the TSX Venture Exchange (“TSXV”) under the symbol “MN.WT”. The Warrants were issued pursuant to a private placement financing of the Company completed on September 3, 2020 and are governed by a warrant indenture between the Company and Capital Transfer Agency ULC, as warrant agent. Each Warrant entitles the holder thereof to acquire one common share of the Company at a price of $0.15 per share until September 3, 2023.
Here is a chart of their warrants (MN.WT) since they were released.
The other fundamental news was about the favourable metallurgical results from the Battery Hill Phase 2 program.
Our very own Lukas Kane covered this and other major fundamentals of Manganese X in is latest article on the company. It can be read in its entirety here. If you want to learn about the project and the catalysts going forward, you want to read Lukas’ article.
Now onto the technicals.
Long time readers will remember that I mentioned the bottoming and potential reversal pattern back in the last week of December. In a Market Moment aptly named “Manganese X Reversal Pattern Set Up!”. Take a look at the chart of Manganese X pre breakout because the same pattern can help you play future breakouts in other stocks.
Then last week, I highlighted the breakout confirmation on Manganese X, the pullback to retest the breakout zone and why this is normal in price action, and finally, my next target to the upside. And guess what? We hit the resistance zone mentioned. In fact we flew past it.
Yesterday’s price action took us well above the 0.60 resistance zone I highlighted in last weeks analysis of Manganese X. This is technically another breakout. Of course the breakout candle was very strong. When we have such a strong candle, we should expect the momentum to continue into the next day. As you can see from today’s candle, we did indeed continue the momentum and have actually hit our second major resistance at the 0.90 zone. Mind you today’s daily candle still has a lot of time until close. We are talking about over 5 hours. It could very well end up printing what is called a shooting star candle if more profits are taken here.
So what comes next? Well technically the higher low swing we are working with still sits at 0.30. Manganese is in an uptrend as long as price remains above this higher low. We should expect another higher low to form. Meaning we see price eventually pull back before swing back higher to maintain the uptrend.
Remember our breakout trades. Breakouts tend to see price eventually pulling back to retest the breakout zone. In this case, we should expect to see price pullback to 0.60. From here, we should see buyers step in and hold the line.
If we get a candle close above 0.90, Manganese X would target the highs at 1.10, before making a larger breakout.
What do I mean by a larger breakout? I am talking about going to the weekly and monthly chart and seeing that there is no resistance until we pass over $2.00 a share. Catalysts would include the drilling, but also EV in general. Tesla printed new highs yesterday, NIO is still hot, and Apple and Baidu are announcing plans for EV’s for the future. We will need more Manganese for the batteries to power these vehicles.
Lukas Kane spoke about Biden’s green energy plan, and then this was announced yesterday. President Biden wants to replace the US governments fleet with EV’s.
Full Disclosure: Manganese X is an Equity Guru marketing client.