Yesterday, Sixth Wave Innovations (SIXW.CN) announced that they are in the final stages of preparing the company’s beta version for its cannabinoid purification system. The stock surged over 30% and volume ended at 1.1 million shares traded for the day.

 

Our very own Joseph Morton covered this news story yesterday. For the breakdown of this announcement, read his article here.

 

The initial unit will be undergoing a series of performance tests at SIXW’s research facility in Maryland, and is expected to be finalized in the coming weeks. The lab test work will put together their standard operating procedures for the unit, and demonstrate all of its operating cycles in a continuous circuit—including the load phase, wash, elution, cleaning and reconditioning.

“We’re excited to be turning the corner on the development and fielding of our Affinity™ technology,” said Dr. Jonathan Gluckman, President and CEO of Sixth Wave. “The installation of a high-capacity system at our first commercial customer is an important milestone for SIXW. This lays the groundwork for a standardized Affinity platform, capable of being rolled out to a cannabis industry badly in need of scalable and affordable process technology.”

 

“The key features of Affinity — faster processing speeds, lower capital and operating costs, and exacting levels of precision — are in high demand for an industry looking to accommodate major markets now opening in the U.S. and internationally,” said John Cowan, COO of Sixth Wave. “What’s more, the Affinity platform promises to be rapidly scalable to virtually any level of mass production volume, an indispensable feature for an industry now forecasted to experience exponential growth through 2023 and beyond.”

After the performance tests are complete, Sixth Wave will deliver an upgraded ten-column version to its first customer, Green Envy Extracts of Michigan.

 

Sixth Wave Innovations (SIXW.CN) is a nanotechnology company focused on extraction and detection of target substances at the molecular level. Their products provide significant advantages in cost and performance. These advantages are derived from application of their patented technologies in the highly specialized field of molecularly imprinted polymers (MIPs). Sixth Wave is commercializing IXOS®, a line of extraction polymers for the gold mining industry and Affinity™ for the Cannabis Industry.

 

Sixth Wave Innovations is a nanotechnology company that uses patented Molecularly Imprinted Polymers (MIPs) for Imprinting, Capturing, and Releasing substances at the molecular level.

Technical Tactics

Now onto the Technical chart. And oh boy, it does look very promising.

 

 

Readers of Equity Guru’s Market Moment, and members of Equity Guru’s Discord Trading Room know what’s up. This chart meets all of our criteria for an EG style set up.

 

First of all, we know that all markets move in three ways: downtrend, range and an uptrend. Our job as traders and investors is to break these up, and know when the transitions are about to occur.

 

Sixth Wave Innovations shifted from a downtrend to a range. A range which held since Summer of 2020! We are talking about more than half a year!

 

This fact did not escape our attention, and we knew a break would be very substantial. Sixth Wave attempted to breakout above the resistance (or top band of resistance) at $0.42 three times, but failed and held the range. This range was finally broken yesterday on the cannabinoid purification system news. This is now a breakout trade. And what a strong breakout it was just looking at the size of the green candle, which was backed by a volume of 1.1 million shares traded.

 

As breakout trades go, there is a possibility for price to pullback to retest the breakout zone. In this case, that would be the $0.42 zone. The red candle we are seeing today is perfectly normal.

 

There are three ways in which one can play this trade.

 

The first is to enter now. The breakout was strong and is confirmed.

 

The second is to await for a pullback to the $0.42 zone for a better entry. The risk is that the pullback might not take us that deep. Perhaps buyers step in on all drops and bid prices higher. Honestly, where we are currently is pretty close to $0.42. And guess what? We are seeing buyers step in.

 

The final way to enter is to await new recent highs. Essentially, wait for price to break above yesterday’s highs at $0.53. This type of approach increases your probability of success as the momentum will likely carry price forward, but your risk and reward will not be as great as option 1 and 2.

 

This applies for all breakout and breakdown trades.

 

As long as Sixth Wave remains above $0.42, the breakout is in play, and we begin a new uptrend. If price closes back below $0.42, then we have a failed breakout, or a fake out.

Targets

To the upside, there is a resistance zone at $0.625 to be wary of. But other than that, the major flip zone (an area that has been both support and resistance) comes in at $0.75. That’s a nice 30 cent gain from these levels.

 

If we manage to get above $0.75, then previous record highs and new record highs would be the next target. A lot of this will have to do with the fundamentals and the management. The technicals look prime.

 

Full disclosure: Sixth Wave Innovations is an Equity.Guru marketing client.

 

 

Written By:

Vishal Toora

Vishal has been a student of the markets since 2012, having experience trading markets on a proprietary, boutique investment, and the retail level. His goal is to encourage others to take control of their financial future, and simplify the market with his market structure method. He spends his free time reading non-fiction, supporting Chelsea FC, and participating in too many nerdy things to list.

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