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Looking for a Technical Bottom, Junior Metal Fabricator Bounces off Contract News
By: AllPennyStocks.com News
February 22, 2012
Some stocks just seem to repeatedly find support at a specific level that produces a nice appreciation in share price when the stock strikes that level. Commonly called a “double bottom,” “triple bottom” or even a “multiple bottom” in technical analysis; the support level triggers buying pressure as investors see a value opportunity in the price as a low-end reflection of the company’s value coupled with technical signals that indicate a buy point.
Often times, news happens to hit at the same time as key technical points are struck, further bolstering the potential of upward pressure and strengthening of the bottom support level. In the case of TechPrecision Corporation (OTCBB:TPCS), bottom support seems to be established in the area of 82 cents. The Center Valley, Pennsylvania-based company is an industry leading manufacturer of precision, large-scale fabricated and machined metal components and systems with customers in the alternative energy, cleantech, medical, nuclear, defense, aerospace and other commercial industries. As it happens, news hit the wire today in which TechPrecision announced that its Ranor subsidiary has received orders totaling over $1.1 million for various components for an advanced proton beam cancer treatment equipment.
Proton therapy is a type of particle therapy frequently used in cancer treatment which uses a beam of protons to irradiate diseased tissue. Proton therapy provides a distinct advantage over other types of external beam radiotherapy through the ability to more precisely localize the radiation dosage. TechPrecision is taking beam therapy to the next level by offering a smaller, cost-effective alternative that is designed to preserve all of the treatment benefits of traditional proton treatment systems while removing the obstacles of size, cost and complexity.
"There is considerable optimism in the market as our customer works through the process of qualifying their first production unit in the field,” said James Molinaro, CEO of TechPrecision. “[our] Ranor division will continue to deliver high-quality machining, fabrication, testing and manufacturing expertise for this very advanced and precise equipment.”
The orders, slated to ship around the first and second quarter of fiscal 2013, include large-scale machining, fabrication and testing for this advanced form of radiation treatment equipment using superconducting technology.
Material events seem to be happening regularly for TechPrecision through its subsidiaries. The Ranor deal from today comes on the heels of last week’s announcement that TechPrecision’s other subsidiary, Wuxi Critical Mechanical Components Co., Ltd., executing a purchase agreement with an existing Tier-1 customer to produce sapphire chambers at its facility in China. The new agreement resulted from the successful completion of prototype units being delivered to the customer earlier this month. Orders are targeted for shipment as early as next month with the value of the contract nearing $10 million throughout the end of 2013.
The stock appears to be tightly held with insiders controlling 35.87 percent of the only 17.84 million shares outstanding, somewhat limiting the trading volumes on a daily basis. As such, only 56,000 shares changed hands in today’s trading, with the stock closing up mildly by 0.58% at 86 cents. Importantly, though, shares continue to hold the bottom support. As long as the support remains intact, the potential for a double bottom pattern looms for the chart as the last time it came off of these levels, the stock price bounced to hit $1.13. For the double bottom to truly play itself out and signal an overall trend reversal for TPCS, volume will need to increase and the $1.13 resistance level will need to be broken. If the company can continue to crank-out news of million-dollar contracts, the concept of fundamental and technical trading colliding for a surge could possibly happen. Proper due diligence is, of course, recommended.
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