Detailed chart analysis of past trading action
Identified where reversion and break-out trading occurred

The image below is the chart of VirnetX Holding Corp stock ( ASE Ticker Symbol: VHC ).

It is a multi-days chart showing Composite Time Price Opportunity (TPO) Profile on the left side and Composite Volume Profile on the right side.

This is an unique charting technique and requires some explanation on how to read the chart.

This chart shows more information than the conventional graphical chart.  Reading this chart will stimulate your whole brain.  The left hemisphere of your brain which is responsible for logical, rational and analytical functions will be engaged by the numerical data portion of the chart.  The right hemisphere of your brain which is responsible for the intuitive and subjective functions will be engaged by the graphical portion of the chart.

This gives you an advantage of engaging your whole mind when it comes to trading instead of using just a section of it.

Showing Time Price Opportunity (TPO) Profile side-by-side to Volume Profile gives you a quick synopsis of

1. which price levels received the most trading volume
2. at what time during the trading session had it traded there
3. how many times it had backfilled to those price levels
4. where reversion trades worked for traders fading the move as price traded back and forth to form a cluster node
5. see where and when break-out trades occurred as price spends very little time trading there

(Click on image below to bring up thumbnail and enlarge the chart, hit refresh if chart image is stale)

Legends:

1. VAH = Value Area High
2. VAL = Value Area Low
3. POC = Point of Control (i.e. where most of the trading volume had occurred)
4. VWAP = Volume-Weighted Average Price
5. BOO = Break-out Octet. Minimum stop loss risk on false break-outs
6. BDO = Break-down Octet. Minimum stop loss risk on false break-downs
7. Each TPO letter represents half hour intervals
8. TPO letter A marks the beginning of the regular trading session
9. TPO letter M marks the end of the regular trading session

Company Profile and Fundamental Analysis

VirnetX Holding Corporation, an Internet security software and technology company, is engaged in commercializing its patent portfolio by developing a licensing program as well as developing software products designed to create a secure environment for real-time communication applications such as instant messaging, VoIP, smart phones eReaders and video conferencing.  The Company's patent portfolio includes over 48 U.S. and international patents and pending applications that were recently declared as essential for 4G security specifications and provide the foundation for the Company's unique GABRIEL Connection Technology.

In March 2010, a jury in U.S. District Court for the Eastern District of Texas awarded VirnetX $105.75 million in a patent infringement action against Microsoft.  One day after the jury award, VirnetX filed a second lawsuit against Microsoft, alleging that Windows 7 and Windows Server 2008 R2 violated its VPN-related patents.

Microsoft Corp. decided to pay VirnetX Holding Corp. $200 million to settle the 2007 patent infringement lawsuit and the subsequent filing charging the software giant incorporated VPN technology it did not own into its Windows and Office Communications Server products.  Under terms of the settlement, Microsoft said it will license VirnetX’s technology.

Riding on the wind of it success, VirnetX filed more patent lawsuits against Aastra USA, Inc., Aastra Technologies Ltd., Apple Inc. (NASDAQ: AAPL), Cisco Systems, Inc. (NASDAQ: CSCO), NEC Corporation, and NEC Corporation of America in the United States District Court for the Eastern District of Texas.

Prior to winning its lawsuit against Microsoft,

• VirnetX had revenue of only $26,000 for 2009.
• The company consisted of 12 employees.
• Revenue jumped from $26,000 in 2009 to $200,023,392 in 2010 from Microsoft's settlement.

The trading excitement in VirnetX stock price is that the company can scare other deep pockets technology firms into big settlement with them.

 

 

 

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