I was concerned about the lack of supply on the offer side of the market at yesterday’s close, and the market makers have taken advantage of the situation.

In yesterday’s edition, my advice was to put in a limit order at $.75. The stock closed at $.72 yesterday, and reopened this morning at $.81- that’s a 12.5% gap in the price.

I don’t like gaps at the open. Over 50% of the time, the gap gets filled. Gaps are like a vacuum in nature, and nature wants to fill a gap.

You can plainly see from the chart the stock has gapped open a described above.

Typically, in a gap situation like this, the market makers come to work in the AM and find dozens of new market orders on their desks. They buy out the existing offers for their own accounts, and then short the stock to market orders, with the intent of buying back when the buying is exhausted at lower levels, and scalping a few cents for their trading accounts.

In the case of a small stock like this, it is always best to stick with your initial maximum limit price. I advised $.75, and I am sticking to it. If you paid north of $.80, you might have to watch the stock trade down a little before it trades back up.

Over the long term, I doesn’t mean much. However, maximizing your trading strategies is always wise. Keep your limit order of $.75 in place for a couple of days and see if it gets filled. With every Wall Street fund manager turning into a weatherman these days, we should have a chance to reload at the $.75 level.

DSEN has enjoyed a strong week. Late Tuesday and first thing Wednesday morning you could have bought the stock in the $.30 to $.32 range.

As I write today’s BLOG, the stock is trading in the $.40 range, for a solid 33% gain over the past two days.

The OTC Journal brought the value and quiet trading to everyone’s attention, and investors responded.

The stock has only traded about 600,00 shares this week, yet it has moved up by 33%. This simply reinforces my view that many of these oversold microcaps can bounce for big short term gains on relatively light volume.

For the time being, I would hold off on jumping in. In the normal cycles of trading, the stock is now entitled to pull back a little as short term traders lock in profits. It is likely the stock could be accumulated a little cheaper in the coming weeks- perhaps the $.34 to $.36 range.

On the other side of the coin, I wouldn’t be in any big rush to sell either, even if you bought in the $.30 range. The stock has the potential to go much higher over the next several months. Simply be prepared for the possiblity of a pullback.

American Water Star received a serious jolt of activity and price appreciation in today’s trading activity.  The company was out with news pre - open that it was shipping water to FEMA for the emergency relief efforts for Katrina. In an earlier press release, AMW stated it was running as full capacity to ship water in it’s collapsable pouches to aid the relief effort.

As a result of today’s news, shareholders are being treated to much needed relief. The stock is trading at about the $.40 level, up about 60% from the levels it has been camped at for the entire summer.

I don’t have any information from the company, but the press releases bring up some interesting possibilities. According to press release 2, the company has orders to work round the clock. It does not specify if they are actually working round the clock right now.

Plants mentioned are: “Phoenix, Jacksonville, Magnolia and Kentwood. Estimated production capabilities are 125 truckloads of water per day, seven days per week. ”

The language is interesting. If they are indeed shipping 125 truckloads of water daily, it’s a substantial amount of revenue. Hawaiin Tropic was about $15,000 per truckload in revs. If water is 1/3 that, it translates to $625,000 per day in revenues, or $228 million in annual revenues.

In an early press release, AMW stated it was shipping as much water as it could in pouches. However, if memory serves, the pouch packaging business was to be spun out of the parent company, and if you weren’t a shareholder before about March of ’04, the revenues won’t flow to the company you own.

With no specific revenue numbers in the news releases, it’s tough to predict what this all means. The language is a little vague, but putting a pencil to 125 truckloads of water daily certainly puts a charge back in the possibility.

Because of the many past undelivered promises and anecdotal evidence of deep rooted problems, I am not prepared to say this stock is a buy. I need a lot more information and will make an effort to get it over the next couple of days.

For those who have given up on this company due to its past history, this dramatic surge in price and volume could be viewed as a selling opportunity. Perhaps a partial sale is in order. That way, you will have some money off the table, and still own the stock if this is the real turn around event. As more information comes, you can always buy it back if it is highly favorable.