Smearing You With Profits

I was asked to look at this idea early last week, and I decided to pass on it. Technically, the stock looked great, but it was just too extended to the upside for my taste. I prefer lower risk entry points, so I decided it wasn't for OTC Journal members.

Friday, my point of view changed. This is a Trading Alert. This idea is for you active traders- you opportunistic profit hunters who are looking to take advantage of an extreme condition to put some money in your pocket.

There's lots of hoopla about this stock- after all, this was a $.60 stock back on September 4th. It peaked Friday at $1.30 (116% gain), and had ratcheted up to about 400,000 shares in daily volume.

An opportunity presented itself Friday when the stock crashed as a result of guess what- something OTC Journal members are familiar with- a smear article in Seeking Alpha authored by an anonymous guy who's written 4 articles in total.

If you had acted when they smeared Plandai (PLPL) a week ago you could have clipped a 32%, one week profit.

If you had acted when the Hatchet Job article came out on Nuvilex (NVLX), you could have notched a 45% trading profit in 5 days.

There's no guarantee the pattern will repeat itself here, but the magnitude of the drop suggests a bounce is imminent and could be highly profitable. Enter with a tight stop, and expect a repeat of PLPL or NVLX.

Here's the story:

Alkaline Water Company (WTER): The Latest Beverage Craze

Alkaline Water is the latest beverage craze in the healthy consumption arena. I happen to know this from personal experience. I know some professional MMA fighters, and this stuff is all they drink.

Alkaline water with a pH of 8.8 and trace minerals is believed to be optimum for body absorption. According to one report I've read, Sean "P Diddy Combs" and actor Mark Wahlberg has already invested in Alkaline Water companies- it's the latest fad.

WTER started to trade up when the company announced a letter of intent to purchase the North Cove Bottling Plant in Marion, North Carolina.

The web site (http://www.thealkalinewaterco.com/) states their product is now packaged in 2 sizes- the 3 liter and 1 gallon bottles you see pictured here.

Here's what I know for sure- this stock was red hot and climbing until another of these Seeking Alpha hatchet job articles came out. As luck would have it- the article came out at the end of last week, just in time for you to take advantage of a far lower risk, high return entry level.

Deja Vu All Over Again?

Here's the chart. Click on it to enlarge if you like.

This is a pattern we've just seen repeated twice, and there was 40% to 50% return on a trade within a week on both PLPL and NVLX if you had the courage to act while everyone else stayed on the sidelines.

WTER fell on Friday- dropping from a high of $1.30 to a low print of $.671.

The usual hatchet job article was long on implication and short on fact as they all are.

I don't know if this company will be commercially successful- it's a ways out to buying a bottling plant and being on grocery shelves all over the country.

However, I'm sure the stock was $1.30 in the early going on Friday, only to end the day at $.709 as you can see from the long red bar on the chart.

The chart tells me this stock is entitled to bounce back to at least $.85, and if that level can give way, $1.02 comes into the picture.

From Friday's close, that would be short term profits of 22% and 46% respectively.

If the stock is stable or moving up Monday morning, traders should pounce. Keep a pretty tight stock in case it decides to go the other way- I would suggest your SSL should be set $.10 below your entry level. Give yourself ten cents of latitude for any sort of brief move down.

If the stock looks lower at the open Monday morning, wait for stability, then take your stand.

I love the risk/reward here for those looking for a short term trade to notch a nice gainer.