Is it the real deal? Many have been recently betting Matterport (NASDAQ:MTTR) is just that. Today let’s explore what’s happening in MTTR stock, then offer a risk-adjusted determination aligned with those findings.
MTTR. It’s a recent special purpose acquisition company (SPAC) merger that acquired Matterport, a 3D imaging company.
But don’t be quick to judge Matterport by its ignominious cover—or risk missing out on one of the group’s more unique opportunities.
Unlike many of its fast-lane peers whose fortunes are tied to the electric vehicle (EV) market such as QuantumScape (NYSE:QS), Fisker (NYSE:FSR) or Blink Charging (NASDAQ:BLNK), MTTR is a spatial 3D software play.
More important than that simple distinction and if the Twitter worthy elevator pitch didn’t resonate as cool-sounding, today MTTR’s technology is gaining increased traction as a picks-and-shovels business in a very nascent metaverse market.
Now Matterport has your attention, right?
The Deal of the Century?
With the help of Facebook’s rebranding in late October to Meta Platforms (NASDAQ:FB), the highly-immersive and still largely untapped virtual world has almost overnight turned into one of the next big things on Wall Street.
And Matterport appears to have an inside track. With its technology’s ability to turn a physical space into an immersive 3D world, the applications within the metaverse appear to be a good fit.
Who needs stinking cryptos, right? Well, maybe.
Whether date nights, NFT markets or corporate social interactions actually move into the metaverse remains to be seen.
Still, when Meta Platforms was still just plain ol’ Facebook, the two did strike a real world deal.
The partnership between Matterport and Meta Platforms looks to create the “largest-ever data set of 3D indoor spaces exclusively for academic, non-commercial uses.”
At the end of the day, the sky isn’t the limit for MTTR stock. And here on planet earth, price still matters and often has physical constraints like gravity.
Some overzealous bulls have found that out the hard way with Matterport shares cratering as much as 40% in just four trading sessions at Monday’s low.
But with our boy Data hoping you’ll like Facebook’s continuing encroachment on your life even more than today’s digital experience, I’d proffer using the weakness to your advantage with less risk both off and on the price chart.
MTTR Stock Weekly Price Chart
Whether the metaverse turns into the internet’s next evolution and worthy of today’s hype remains to be seen.
But based on what’s unfolding in MTTR stock, overall I like what I’m seeing thus far.
Technically, the corrective activity of the past week has allowed shares of Matterport to test its recent breakout from a slightly-flawed cup-with-handle base for support.
At the moment though, buying on weakness is without the benefit of having a supportive stochastics setup. Currently the secondary indicator has just finished bearishly crossing over out of overbought territory.
The good news, without being too hopeful, is today’s lack of technical backing could change quickly.
Also, with Monday’s low forming a possible weekly pivot mostly on top of the handle consolidation and sandwiched between MTTR stock’s 50% and 62% Fibonacci levels, an emerging uptrend looks more promising.
For now I’d suggest monitoring Matterport for price action to confirm a weekly candlestick bottom.
As well, having stochastics firming up prior to a purchase makes sense as MTTR stock. Personally, I’d refrain from any knife catching entries as Matterport remains a more speculative name whose only value could be a great deal lower.
Bottom-line, and should those conditions be met, a well-placed, limited-risk bull call spread such as the July $30/$45 vertical, which offers an intermediate-term lease on this emerging but still-to-be determined space, looks about right off and on the price chart.
On the date of publication, Chris Tyler did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional market insights and related musings, follow Chris on Twitter @Options_CAT and StockTwits.