After leading the bull market rally back from lows a year ago at the peak of the COVID-19 pandemic panic, tech stocks stumbled in mid-February, with popular plays like Tesla (NASDAQ:TSLA) getting hit especially hard. The retrace looks short lived, including Tesla re-collecting over 100 points last Wednesday to notch its best day in over a year. For others, such as KULR Technology Group, Inc. (OTCQB:KULR), the tech consolidation aligned perfectly with a big run, effectively creating a bullish pennant pattern that has tech traders looking for the next breakout.
The San Diego-based company is an expert in next-generation lithium-ion battery safety and thermal management technologies, with its products the choice of the likes of NASA and Tier 1 aerospace companies for years now. In a niche part of aerospace, the microcap went mostly overlooked by investors until last year when it started focusing its efforts on large-scale commercialization where there is an opportunity to penetrate every market that uses rechargeable Li-ion batteries, from electric vehicles to tools to electronics to medical devices and everywhere in between.
KULR this month added to an already impressive team guiding the commercialization initiative, appointing Keith Cochran as President and COO. Cochran is a well-known name in tech circles, recently serving as SVP of Jabil Greenpoint’s (NYSE:JBL) Global Business Units in Singapore, where he led the $3.7 billion revenue smartphone technology division and its over 65,000 employees across the U.S. and Asia.
Investors are taking notice as evidenced by regular trading volumes since last June, along with a pattern of higher lows as the stock price trends towards its all-time high at $3.70.
Technical traders may call the pattern that KULR has formed different things. To some it’s a flag pattern and others may call it a symmetrical triangle or a wedge. Whatever the name, the interpretation is the same as a bullish continuation pattern that got legs to it when KULR broke through resistance around $1.75 last month.
Now traders are looking for a second breakout where the stock price smashes through resistance at $2.62 on a surge in volume. If that happens and KULR keeps playing by the rules of technical analysis, it should make a new higher high over the recent high of $3.01 printed on February 17.
Technicians generally will use the starting point for the sharp climb as the basis to calculate a target. In the case of KULR, it’s fair to call that point $1.20, which is then subtracted from the high ($3.01) for a height of $1.81. The height of the move is added to the breakout point ($2.62) to create a technical target at $4.43, which would represent a new record high for the stock price.
