Microvision Looks Ready For Another Short Squeeze: What's Next?

On Thursday, Microvision Inc MVIS announced it will join the Russell 2000 as of June 28 when the stock markets open.

The Russell 2000 index is often thought of as a bellwether of the U.S. economy because it is made up of 2000 small-capitulation companies and largely reflects only the domestic market. Membership for the Russell 2000 is determined by objective, market-capitalization rankings and style attributes.

Microvision, a lidar and laser scanning technology developer, has a market cap of approximately 3.3 billion, with a total float of 156.73 million shares trading at $21.25 at Wednesday’s close. Notably, especially to the Reddit community who likes the stock, 33.5 million shares or 21.21% of the total float is held short as of May 28.

The high percentage of total shares held short makes Microvision an ideal candidate for a second short-squeeze, similar to the squeeze in April when Microvision’s stock skyrocketed 176% between April 21 and April 27.

Not only does Microvision have short-squeeze potential, but it also developed a bullish-looking chart.

See Also: How to Buy MicroVision Stock Right Now

The Microvision Chart: After the last short squeeze, Microvision fell about 56% to $12.22 where it found a bottom. On May 25 volume began to increase in the stock and on June 1 Microvision was able to clear a resistance level at $17.74 and close above it. After consolidating the move for two days, Microvision’s stock made another bullish move north and closed above a second resistance level at the $19.37 mark.

After reaching $23.46 on June 7 Microvision has, again, consolidated and set up a bull flag pattern with the pole created between June 1 and June 7 and the flag created over the course of June 8 and June 9. If the bull flag pattern is recognized and big bullish volume in the stock is maintained, Microvision’s stock could fly over resistance at the $23 level.

Microvision is trading above both the 21-day exponential moving average (EMA) and the 21-day EMA with the eight-day EMA trending above the 21-day EMA, both of which give bullish indications. Microvision is also trading above the 200-day simple moving average with indicates overall sentiment in the stock is bullish.

Bulls want to see the bullish volume sustain and for Microvision’s stock to jump up and make the $23 level support. If the stock can clear that level, it has room to move back toward its 11-year high of $28.

Bears want to see bearish volume come in and knock Microvision back down below the eight-day EMA. If the stock was unable to hold the level as support it could revisit $19.37 and a loss of that level could mean Microvision will revisit $17.74.

MVIS Price Action: Shares of Microvision were trading up 13% to $24.05 at publication time.