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TORONTO (GlobeinvestorGOLD) — Altair Nanotechnologies is a company dealing in, as the name says, nanotechnology.
The field involves the use of materials so small that their dimensions can be measured in atoms. Altair is organized into two divisions: Life Sciences and Performance Materials. The Life Sciences Division is pursuing market applications in pharmaceuticals, drug delivery, dental materials, cosmetics, and other medical markets, while the Performance Materials Division is seeking market applications in advanced materials for paints and coatings, titanium metal manufacturing, catalysts, water treatment, and alternative energy. Many of the product technology initiatives that the company has been working on in past years are now coming to the commercialization stage.
On Jan. 7 and 14, the U.S. Patent Office awarded Altair two patents for so-called next generation lithium ion batteries. However, it wasn't until Feb. 10 that the company explained in layman's terms the significance of the patent announcement. In effect, the company had achieved a breakthrough in battery materials "which will enable a new generation of rechargeable battery to be introduced into the marketplace, as well as create new markets for rechargeable batteries."
The company says the new materials allow rechargeable batteries to be manufactured that have three times the power of existing lithium ion batteries at the same price and with recharge times measured in a few minutes rather than hours.
Also, the longer-lasting, faster-charging batteries could be produced at no additional cost. The stock's share price soared 130 per cent to $4.77 (U.S.) and then it vaulted another 37 per cent on Feb. 11 to a high of $6.52 before closing down at $4.40 the same day.
However, since then the stock has retraced 80 percent of its gain and appears to be finding support in the $2.80 area, it may offer an interesting speculative opportunity. On a simply technical basis, the daily chart indicates that the stock could almost double again from its current price.
The share price's sharp rally and subsequent decline has caused it to form a bullish falling wedge pattern. In some rare instances, as in the case at hand, the stock could break down further out of the pattern causing a false breakdown and a potentially another buying opportunity. The extremely low volume associated with the declining price further supports the argument for it being a false breakdown.
The stock, having touch the lower oversold Bollinger Band, has moved sideways away from the band, which suggests that a renewed rally is close at hand. Once the stock price re-enters the wedge zone, the near-term technical measurement suggests a target of about $5.30.
The weekly chart shows that over the past four years the stock has traced out a bullish inverted head-and-shoulders pattern. When the stock closed above the $4.27 neckline resistance level on a weekly basis, as it did during the business week ending Feb. 11, the move suggested a breakout to the upside. The pattern had suggested a target of about $8 over the next three months, with a possible minimum downside risk to the 10-week moving average at about $3 at that time. The stock, as we now see, took the path of least resistance and declined on low volume exceeding my initial downside projection. However, the long-term target is still in tact although the timing of the upside target of about $8 is now extended by at least 2-3 months.
I have been following this stock for the past two years and wish to advise any investor considering purchasing the stock that I, along with members of my family own positions in the stock in various investment accounts.
Yola Edwards is a contributing writer and technical analyst for Bell Globemedia Interactive, providing options and technical analysis research on a variety of North American equities.