With $MVCO and $RITE recently making noise in the vicinity of their long term (decade+) ceiling levels, it's a good time to revisit the #OTCSET pattern and why I think they're going to be special plays and worth looking out for. 

Your typical OTC runner is a dead cat bounce play. It's a long term, never ending downtrending stock which seemingly never finds a floor thanks to reverse splits and dilution, but once a blue moon gets accumulated then squeezed for a big pop, only for the long term cycle to continue.

I attached a typical example of this standard pattern, of which the theme is secular lower highs and secular lower lows. Look at the long term trend and look at the historical prices. Did  GROM ever actually trade at $5,000, $10,000 and even higher back in the not so distant past? Not technically but thanks to reverse splits and dilution, that's the prices the current share structure would need to return to for the buyers back then to break even. 

To appreciate why a play like $RITE and $MVCO (and many others) are so exciting currently is to appreciate that their LONG term trends are entirely opposite of what a historical OTC runner's long term trend looks like. If GROM wanted to breakout to new decade+ long highs, look at how far it would have to run to get there, and how many historical bagholders would there waiting to sell, ie how much overhead resistance there would be to grind through. This long term trend is constant headwinds for the bulls for a number of reason, and in fact is so strong that it gives shorts the confidence to short any and all pops, hard, no matter how explosive the moves are. In the end, a perpetually downtrending stock is likely never going to recover over time, and that cycle of breaking floor after floor (there is no true zero) is a major strength for the shorts.

A breakout to new secular highs implies NO bagholders waiting to dump at break even prices, so there's significantly less resistance to hold back the price. The trend is your friend, and historically the long term trend is not the friend of OTC bulls. We all know that any OTC can have massive short term rallies, even the worst of the worst. What we haven't seen however is when a good number of OTCs can do more than just have short term blips of strength on a long term dying chart, and instead they build up long term momentum and form secular higher highs and higher lows. If the company can use this strength in the chart (which is a reflection of a relatively strongly held float and lack of toxic dilution killing the potential), then combine that with a sound business model which will grow over time and make proper use of capital raises, then the OTC can see a period of sustained runners - or at least mega squeezes as shorts get wrung out at new long term highs. 

THAT is why I think a play like $RITE can be special. It's a completely atypical long term chart which I believe atypical type of upside. The timeframe however is such that you need to keep expectations in check. I've literally been waiting years on some of these patterns to play out and only recently are things starting to bubble up a little. We need to see not just one but more than a few of these patterns retest their ceilings and win the battle at those respective levels. This is still the slow, climb the wall of worry phase. The obvious and easy bull market is when many of these tickers are all near/at/above their secular ceilings all at once, and the momentum builds. That's why I believe something like $RITE, $MVCO and any of these patterns near their key resistance/ceilings/secular trigger points are key to watch. Give them time, expect hot and cold phases as consolidation is healthy, but then be ready to turn much more bullish on the OTC as these strong plays lead the way. Trust me, there will still be plenty of dead cat bounces out there, as those are the heart of the OTC, but an unprecedented number of OTC secular higher highs all triggering in the same general time frame is going to be legendary.