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POSITIVE SUPPORT!  MCIG closed above its 50 DMA!

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Today, April 7, 2014, has been another down day for the market and especially brutal day for small caps.  For the first time in awhile, MCIG dropped to as low as .50.  However, it then rose and closed at .60 which is a positive sign because it means that support exists to keep it from going below .54 per share (it's 50 Day Moving Average).

Why do I think MCIG is a better pick than most small caps?  

I mentioned some of the reasons in the comments where I compared MCIG to INVE here:

http://seekingalpha.com/article/2128113-identive-group-a-play-on-security-and-the-internet-of-things-theme

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Nice article. I, too, have traded (INVE). I sold over $1 but have kept it on my watchlist for a possible re-entry.

 

Today though, INVE not only fell below $1.00 but also briefly feel to .90 which is below its 50 DMA of .93. I take no joy in saying that things do not look good for INVE keeping its NASDAQ listing now - unless perhaps it does a reverse split. Since a reverse split may take time, my hope is that INVE starts that process now.

 

Generally, it looks like major institutional buyers, which ran tech prices up earlier, are now dumping tech stocks. Some are buying defensive / large cap stocks. Some might be going to cash (perhaps for reasons of seasonality ("Sell in May, Buy in October"...which is becoming sell in April...).

 

On the positive side, the Internet of Things is a concept which Google is exploring too. If you write another article on INVE, I'd be interested to know how likely it would be, compared to other competitors, to be a takeover candidate. Eg - after the purchase of Nest, would it make sense for Google to also purchase Indentive? Or would Apple or another company see it as a takeover target? I don't know how much the big players have already done in these areas.

 

As you mentioned INVE is a speculative / risky stock. As followers of my comments know, I am already invested in another speculative position (OTCQB:MCIG). Ironically, MCIG also broke below its 50 DMA (of .54). If it drops to .54 or thereabouts again, I am likely to buy more shares. I've been buying shares from as high as around .80 down to around .63 per share. Maybe I'll lose it all, but I don't think so.

 

A few differences I see between INVE and MCIG:

 

- MCIG is working to move UP to NASDAQ (and has a good chance via reverse split if necessary) to do so. While a reverse split to uplist to NASDAQ can be promoted as a positive catalyst; imo, a reverse split for INVE to remain in the NASDAQ sounds bad and could lead to a further decline.

 

- MCIG is the first marijuana ecig that I've heard of (it seems like others are now attempting to follow, but MCIG has a First Mover Advantage.

 

- MCIG appears to have a moat in a certain niche of eCigs that BigTobacco might not ever want to target because most pot smokers I know rarely smoke regular tobacco. Ecig marijuana cartridges could help "standardize" one's hit. Also, I think other reasons exist that may make this product, and Vitacig, appeal to consumers who would ordinarily reject an ecig from a traditional tobacco company. It may sound silly, but I think a lot of cigarrette (or ecig) sales are (or will be) based on marketing. By page 14 or 15, I felt MCIG's investor presentation compelling. Here is a link:

 

http://bit.ly/1kg152y

 

Also, MCIG's management has decided to prominently list the daily price per share of its stock on its home page. I wish INVE's site made me feel that it paid as much attention to its share price. When I owned INVE, I didn't feel like it was as concerned about its share price (or shareholders) as I feel MCIG is.

 

That is not to say that I want INVE to suffer. Like you, I reserve the right to re-enter INVE or buy or sell MCIG at any time. I plan to post any changes on my MCIG holdings on my blog:

 

http://bit.ly/1mrNpT3

 

Generally, I plan to buy more MCIG if it falls below it's 50 DMA. It would be like half of the price I originally began buying it at! And the fundamentals have not changed one bit!

 

IMO, we've seen both have some support exists by today's close over their 50 DMA. I hope that over time both rise above their 50 DMA. 




 
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