 Folks, welcome to a contrarian analysis of ocean power technologies incorporated stock symbol OPTT. This is a micro cap stock and the topics we're going to discuss today with regard to OPTT are going to be the company profile fundamentals news driving the stock price insiders and what they're doing or what they're not doing performance TTM which is 12 month moving average as well as the year to date average and then what I'm going to want to do is I'm going to want to segue over into doing some technical analysis of the charts both long-term and short-term using Trendspider and their automated technology platform. We'll also discuss analyst ratings, seasonality as well as catalysts which could drive the stock price higher or lower and that will include events and my technical analysis both long and short term and if you stick around to the end I'm going to give you my opinion of whether or not ocean power technologies incorporated is a buy, sell or hold on both a long and a short term timeframe. Before we begin with our analysis of ocean power technologies I'm going to ask you to please smash that like button it really helps me out with the YouTube algorithm it really helps support the channel I would encourage you to leave a comment I will definitely get back to you subscribe to the channel and certainly share with a friend on social media and I would encourage you to please join our live streams on Sunday evenings as well as Thursday evenings where on Sundays we discuss the futures action 6 p.m. Eastern Standard Time each Sunday evening we'll watch and see how the futures are opening because that is truly the beginning of the new trading week then on Thursdays we do a Thursday night stock charts live where we review the weekly charts and how are poised to close out the week and of course on both live streams on YouTube we do take stock chart requests and we'll review the symbols that you're interested in so now let's begin our analysis of ocean power technologies incorporated symbol OP TT ocean power technologies incorporated is not a new company it's been around since 1984 to the United States based company out of New Jersey in my research I've found it as listed in both the electrical component sector as well as the alternative energy sector I believe it's more appropriate to be in the alternative energy sector I'm going to tell you why later on in the video that I believe that it's the alternative energy aspect of this company that will help drive future performance but there will be a caveat coming up soon that could influence the share price so stick around to the end of the video now being an alternative energy play ocean power technologies develops and commercializes proprietary systems that generate electricity by harnessing the renewable energy of ocean waves in North and South America Europe and Asia it's a global company now the reason why I believe it to be in the electrical component arena is because alternative energy is only one segment of their business they're also in communications the fundamentals of the company are not wonderful it is losing money there is a cash burn factor we'll talk about recent news in a moment that's helped mitigate that concern quite a bit their revenues year over year have improved considerably however they have not been able yet to turn a profit it does not pay a dividend but its balance sheet is fairly strong it has over 11 million dollars worth of cash versus debt of 2.14 million as for recent news in the company on October the 7th of this year market actually reported that there was a 34% increase in the share price and the interesting part about this is that there was no news out of the company and just prior to that the stock had soared 66.4% on big volume the Tuesday prior and before that you had a 24.8% increase on the prior Monday so with no news coming out of the company and volume rolling in very strong this leads me to conclude that you have a lot of institutional demand for the shares which is always a bullish sign for the share price moving forward now what really got the shares kicked off in terms of breaking out back in September was an agreement that was reached between Ocean Power Technologies with Aspire Capital Group where Aspire had agreed to purchase up to 12.5 million dollars worth of common stock over the next 30 months now I'll link to this article below because there is a lot of data with regards to the nuances of the agreement I think should take a moment to read through it because it's a very very good article and the terms are very favorable to Ocean Power Technologies now the encouraging part about Aspire buying the common shares of Ocean Power Technologies is that it may help reduce the volatility somewhat on these shares as it is an extremely volatile stock as you would expect with the microcap insider transactions over the past six months have been nil no sales no purchases the total insider shares held at 28,000 650,000 shares is pretty negligible relative to the size of the shares outstanding end of the float now taking a look at the insider Rouser you could see that one of the directors David Keller has the largest position in the company out of the insiders second is David Hines with 122,000 shares third in line is the chief executive officer George Kirby at 112,000 shares and what I find a bit concerning here is that you have two CFOs which have positions considerably lower than the overall moving average for all of the insiders noted here so to me taking a look at this having the CEO not at the top of the list and the CFOs literally at the bottom of the list that's a yellow flag on the track for me as we look at performance we're gonna look at Ocean Power Technology on two different levels one we're going to compare the performance of the share price relative to the industry average and for this instance we're going to use the electrical equipment industry average and the total annualized return as of September the 18th for OPTT was 28.88% versus the industry average of 67.59% that has changed dramatically in favor of OPTT since the 18th of September which is when we saw the news get announced that Aspire Capital Fund reached an agreement with management to purchase up to 12.5 million shares that was the catalyst to send the shares up higher we'll take a look at the chart and how the shares reacted in a few moments now when we look at the share price relative to the renewable energy sector which I think is more important to Ocean Power Technologies than being measured as a broader based electrical equipment sector the performance year-to-date is up 193.10% relative to the performance of the share price versus the Dow Jones US alternative energy stock market index which has a year-to-date return of 107.61% so a dramatic outperformance versus the alternative energy total stock market index very very impressive now you might be saying that Ocean Power Technologies had a very rough beginning of the year but to be fair the Dow Jones alternative energy total stock market index had a very rough beginning of the year as well so we're talking apples to apples here now moving on to the technical analysis of Ocean Power Technology the shares peaked out in Q1 of 2008 ever since that point in time they've been in a bear market but I think that what we're seeing here is a setup for a stock longer term that may just be poised to consolidate and then begin to break out on a longer term basis so let's talk about what we are seeing and what we need to see for us to get optimistic and get bullish about the share price and I'll leave you with my thoughts of as to whether or not I believe that at current is OPTT a buy seller hold now to perform our technical analysis of Ocean Power Technologies we'll be using Trendspider which is an automated technical analysis platform in short it uses algorithms as well as automated trend lines and a whole bunch of other functionality such as seasonality analysts opinion etc. volumated moving average to perform our analysis of OPTT we'll also be using multi time frame analysis which is built into Trendspider where we review the monthly charts weekly charts daily charts to identify where the share price has been to determine where it might be going both short term and longer term now there's a link down below in the video description area 35 percent off of you interested in Trendspider I strongly encourage it I called up my spell check for technical analysis because as long as I've been doing this from time to time Trendspider picks up something that I may have missed 35% discount code below take advantage of it the lowest price on the web if you're not using Trendspider you're missing out on an arrow in your quiver because other competitors out there are using the same type of software so if you want an edge over your competition make sure that you leveraging the power of technology so that you have an edge over other traders let's get to it we're going to begin here with a monthly chart of OPTT because the way I like to conduct technical analysis is from a very high level view to begin with I want to know where the shares have been to identify where they might be going and the story here is very nice the shares bottomed out back here in January of 16 you may be saying you know Bob we made lower low since that point in time technically they bottomed out back here all you've seen is some backing and filling since January of 2016 and when you throw up the automated trend lines here click of a button you could see that we broke out on a monthly basis here in May of 2020 ever since that point in time we've been drifting up higher and as you'll note the Bollinger bands here's the upper band of your Bollinger band for those who are not familiar the lower band you're seeing an ever tightening bottleneck this is setting up for a potential Bollinger band squeeze and in the moment we're going to talk about catalysts which may help drive the share price higher so stick around until the end so our share price has broken out we have broken out ever since May of this year our momentum indicators are gaining steam our stochastics are now putting in higher highs the relative strength index or RSI is putting in higher highs and breaking out on a monthly basis this is very powerful stuff so we're in the very early stages of a breakout here on OPTT weekly chart now on a weekly basis we had a burst up higher last week we were up nearly 143% on the week we did close out the week above the third standard deviation Bollinger band which is a higher level of Bollinger band that I use relative to an out-of-the-box Bollinger band in short folks I'll save you the technical jargon we're not supposed to be here and you could see that trend spider picked up on an upper band of resistance last week as well where did we close last week right at the upper band of resistance this is why you need to have automated technical analysis at your fingertips the stochastics on a weekly basis higher lows good stuff RSI even a better story in that we are putting in higher lows now we're even putting in higher high this is what a strong stock looks like you're seeing strong price action and it's being validated by your indicators daily chart now on a daily basis we saw an explosive move higher last week which automatically gives me pause and what I want to point out is that early I mentioned on the weekly chart that we were trading above the third standard deviation Bollinger band on a daily basis you could see what the outcome was right we closed above the third standard deviation Bollinger band on the sixth rallied higher on the seventh but it didn't end well right we corrected hard now to be fair on Friday an outside reversal day or you could call it a bullish engulfing day the only negative I have to say here about the price action on Friday was that we closed off the highs of the day which is okay we're talking about an early stage breakout of a long-term consolidation you're going to see backing and filling now where might I be interested in entering a position let's use the automated trend lines click up a button where I would be interested is on a retracement back down to one dollar and sixty nine cents so what I'll do is I'll set an alert now if I buy it's going to be very small because I like to open up small positions initially to see whether or not I am accurate in my call if I am correct then I like to build on strength so we'll set an alert and here's our alert I want to get notified within 10 minutes of us testing this support level in green it's a potential long-entry trade I'm going to keep this active for the next five trading days we'll create that alert and we're good to go when else might I be interested in either a opening a position or adding to an existing position I'll do this as you can see right now we're inside of a ever tightening wedge formation and what I would be interested in is a breakout above where we were stopped on both Thursday and Friday of last week I want to see us close above this resistance level so this alert here is going to tell me when we break out I only care about if we are poised to close above let's call it two dollars and fifty six cents if the shares are successful in being able to close above that mark well then we'll either a add to our existing position assuming that our first alert fired off or if it did not we'll open up a small opening position on a close above two dollars and fifty six cents we'll keep this active for the next five business days our alerts are set at this point in time we let the computer do the work for us trend spider will do the work for us we set it and forget it what we do here at the contrarian trader is we follow a rules based approach either it pulls back to a support level or it breaks out at some point in time those alerts will fire off and we'll make a determination based upon overall market conditions of as to whether or not we want to enter the trade other factors that are going to come into play here are seasonality what is seasonality folks for those who are not familiar we have data going back to april of 2007 which will tell us how the shares perform this time of year now looking at the seasonality going back 14 years on a monthly basis you could see that by and large with the exception of september the shares have closed up less than 50 percent of the time over that 14-year time frame let's keep something in mind though to be fair remember that these shares have been in a bear market a very serious bear market for over 10 of those years so while seasonality is important we don't want to trade solely off of seasonality it's only an arrow in our quiver a bit of information that can help support our decision of how big we want to get in a trade you can have a bullish looking stock price and if historically the shares are down on any given month that you're in that doesn't mean you should avoid opening the trade it just means that perhaps you want to be smaller in your position that way you're managing your risk now while trend spider generally has a robust list of analyst coverage in this sidebar widget here i did happen to find one analyst that was following it and this data is provided by fidelity investments and if you'd like to view this report in great detail i'll link to it on my website i'll list the link below where you can view it at your leisure but i'm going to scroll down i'm not going to spend too much time here we do have one company with data provided by revente versus with a sell opinion as of october the fifth with an equity summary score there's only one firm of very bearish issued on 10 9 by first call so with this data in mind let's talk about where i believe the share price is going longer term and what catalyst will help drive the shares either higher or lower now to arrive at both my short term and longer term opinion on ocean power technologies i'm going to use weekly charts and then a daily chart to walk you through my thought process now in terms of catalyst there is very little short interest in ocean power technology so as a short term catalyst to send the share price higher it's non-existent another concern is that you have very few analysts currently covering the stock so we don't know when a new analyst begins to cover the share price will he come out with a buy sell or hold rating or an equivalent to whatever the company uses in terms of their verbiage if they come out with a hold that means a sell so that's a concern now you might be saying you know he must be concerned about that one sell recommendation by the analysts on OPTT no it doesn't bother me the least because the worst that they could do is reiterate their sell rating which nobody's really going to care about and the best that they could do is go from a sell to a buy so what does that mean we mean it means that we could have some positive headline news if the current analyst goes from a sell to a buy but the negative is that we have potential adverse headline risk or positive risk we don't know if a new analyst begins their coverage but the analysts are the least of my concerns what is most optimistic from a longer term perspective with regards to OPTT is this let's go to a monthly chart we'll come back to the weekly chart keep in mind what the share price is doing on a monthly basis it is breaking out and what I always teach members is this is that the longer the consolidation keep in mind this is a multi-year consolidation on a monthly basis the longer the consolidation the greater the validation of any breakout so on a long-term view monthly view I'm bullish on the share price not overly aggressive but bullish on the share price on a shorter term timeframe I become a little bit more pessimistic for two reasons one technical two the election we'll talk about both now on a technical basis we closed out last week as I mentioned earlier above the third standard deviation boulder band so automatically the fact that we're trading above the third standard deviation boulder band and the fact that we had a wick shadow topping tail call it cupcakes whatever you want to call it on top of this candlestick implies to me that we're going to get a consolidation not a crash but a consolidation and when you take a look at the daily chart we closed out today on this past Friday right at resistance so do I want to buy at a resistance level not really so short term I'm cautious but cautiously optimistic what was that number two that I said earlier that was a concern about the share price the election folks if you see a Biden presidency you'll want to be long of ocean power technology now if you see a trump reelection that does not mean sell the shares it just means that you don't have the green new deal put underneath the share price as you would with the reelection of president trump so to reiterate where I long at current I would hold my position would I buy the shares longer term yes but the short term is I would wait for a pullback then initiate a new position at a support level so in closing our opinion that the contrarian trader is that the share price on a longer term basis meaning a monthly basis the trend is beginning to change from a downward sideways correction and consolidation to now the beginning of an uptrend on a short term basis would I buy the shares no not quite yet I think that short term there are a hold where I currently long but if we do get a pullback to our support level they then become a buy what are the catalysts to help drive the share price higher it won't be short covering there's very little in terms of short interest what would put a put under the share price is a Biden presidency that doesn't mean if there's a trump reelection that the share price will not move up higher the shares have been moving up higher for several months now if you take note again of when the shares begin to really take off it was the week of September the 14th when aspire capital reached an agreement with ocean power tech to purchase up to 12 and a half million shares so while we saw a nice pop since that point in time let's face it folks the shares have been moving up higher for a considerably longer period than that time frame there was probably news out in the market that there was talks on the way and the news flow out of the company turned positive from negative so my longer term call on ocean power tech bullish no matter who gets into the white house folks if you got any value out of this video if you could please hit the like button it really helps me out with the youtube algorithms subscribe to the channel and please leave a comment below I'll definitely get back to you do you agree with me do you not agree with me and don't forget to join us every Sunday night and Thursday night live there's a link below in the video 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