Immersion had been dead money for most of the last decade, excluding a sharp spike leading into the broad market top in 2007. Immersion is now one of the most dynamic investing stories, having risen 125 percent since the March 2009 bottom.
Up 32 percent year-to-date, Immersion is sustaining that momentum, easily outpacing the S&P’s 6 percent gain. Using a 3-month chart, Immersion is trading in a defined uptrend and a rising relative strength index (20-period setting) with a reading of 59 suggests the stock isn’t overvalued. In fact, during the most recent rally, Immersion has been walking the upper bollinger band (10-period setting) for the most part, affirming that the trend may continue.
Look for Immersion to move toward the technically significant $9.64 level, a price the stock hasn’t traded at since June of 2008. A stop loss on a market order to buy near the current $8.80 price may be placed at $8.41 where the stock made two recent lows and then bounced higher.
Haptic technology helped Immersion swing to a profit of $0.05 per share during the first quarter, sustaining a sequential trend of excellent earnings growth. The lack of a dividend doesn’t give a sense of comfort to income investors, but the growth story for Immersion is tangible.