MTD Infra - Buy When Nobody Wants to Buy?

MTD Infra is our discussion stock today on the "Buy When Nobody Wants to Buy" strategy. You can read about this strategy under the "Trading Strategies" section on the right.

When a stock has fallen considerably & all short term sellers have been shaken out of the stock, then it may present a buying opportunity because downside will be limited & unside potential greater. MTDI is displaying this characteristic. It fell from the Double Top high of 1.50 to a low of 0.98 and is now hovering at 1.00. Volume has fallen considerably from a high of 43 mil shares at the peak to just 1.68 mil today, a fall of 96% in trading volume. In fact volume has been steadily falling from the peak & today is almost the lowest.


This indicates that all the weak holders are out. The last time it fell from the first peak of 1.50, it fell to a low of 0.94, then began its steep ascent to the second double top of 1.50. Based on this 0.94 will provide a very strong support. The current level of 1.00 is also a strong support. RSI & MACD are also flattening, showing that selling is getting weak.

The weekly chart is more interesting. The last time it rose after big falls was when we had a spnning top followed by a bullish engulfing pattern (A) and next it was a hammer & bullish engulfing (B). Today we do not yet see any positive candlestick pattern. When we do, it will signal the start of the upside.


Advise- Users of this strategy should WAIT until weekly candlesticks give the buying signal. It might take a 2-3 weeks but when it happens, start picking up shares from that point. The upside resistances are 1.05, 1.10 & 1.20. The potential to rise to 1.50 is there but that would be optimistic. However gains of up to 20% are possible.

So the suggestion is to be patient just for a while longer.