You Ask, We Analyze: Why Sphere 3D Has The Potential To Go Parabolic

On Sunday evening, Benzinga asked its followers on Twitter what stock they plan to buy at the open on Monday. From the replies, Benzinga selected one ticker for technical analysis. @graham_zylstra, @Noah29965496, @GaryWithABigG, @Shaikh883 and @bearbeetbitcoin are buying Sphere 3D Corp ANY.

Retail traders may find Sphere 3D an attractive trade due to its underlying statistics. Specifically, Sphere 3D has a float of just 19.4 million shares, meaning there is not an enormous supply available. The smaller the float the higher the potential volatility, especially if there is a catalyst and stocks with small floats are the most likely to make parabolic moves. It should be noted, however, this doesn't necessarily mean Sphere 3D will go parabolic.

See Also: 21 Stocks Moving in Monday’s Pre-Market Session

The Sphere 3D Chart: On Oct. 6, Sphere 3D broke up from a descending trendline that had been holding the stock down since Sept. 15. The bullish break was likely a reaction to a bullish triple bottom the stock created on Sept. 29, Sept. 30 and Oct. 4.

After breaking up from the trendline, Sphere 3D entered into an uptrend and although the stock has not created any strong higher lows on the daily chart it has formed a series of consistent higher highs and higher lows on the 4-hour chart and various other smaller timeframes.

Sphere 3D has had increased volume over the past two months, which indicates there is a high level of trader and investor interest in the stock. On Friday 51.86 million shares traded hands compared to the average three-month volume of 28.79 million.

This suggests the entire float is being traded about 2.5 times over the trading day, which seems unbelievable especially because about 19% of the float is tied up by insiders and institutions, according to the available data.

Sphere 3D is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading well above the 200-day simple moving average, which indicates overall sentiment is bullish.

• Bulls want to see big bullish volume come in and push Sphere 3D up over the most recent high of $8.69, which will put the stock in reach of a resistance level at the $9.12 mark. If Sphere 3D can regain the level as support it doesn’t have much resistance, in the form of price history, until its previous Sept. 2 all-time high of $11.98.
• Bears want to see big bearish volume come and drop Sphere 3D down below a support level at $7.36, which would cause the stock to lose support of the eight-day EMA. Below the level, the stock has support at $6.52.