Monthly Archives: December 2006

PNWIF: Next Stop: $4

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What a great week for PNWIF. If you didn’t act after last weekend’s BLOG, you can’t say you didn’t have the information. In fact, you had information few had in the market. It wasn’t because we had any “inside information”. We simply had the good fortune to get a little detective work done on our behalf.

Kmart became a client. You knew, I knew it, but the rest of the market just started catching on about Tuesday. You had all day Monday in the $2.50 to $2.60 range. Today’s close: $3.19. Net move on the week: 22.6% and a new multi year high. Very exciting.

Here’s the chart:

pnwif21.gif

They say persistance breaks down resistance. It took three tries at the $2.80 level to break down the resistance in PNWIF. The break down of the resistance led to a break out in the stock.

Since the stock hasn’t traded this high since 2003, it’s really tough to say how far it will run on this surge. Remember, my short term target price on this stock was $4.00 all along ($.40 from the pre reverse split price).

This is an example of a reverse split that is working. They aren’t all bad. This company was done raising money and ready for institutional support. Their timing was perfect.

I started with this one back in August at $1.80. I would use caution on opening any new positions, but the stock could just keep clipping up the charts for all I know.

This turned about to be a huge winner over this short period of time. Comments and questions are welcome.

Strong Buy on HAWK- But Not Here

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NIHK has had a breathtaking week. We started at just under $.04 and made it over $.08 this morning in the early going. It’s just a couple of cents below my target price of $.10- a triple in the last couple of months.

The company started the week by announcing a deal with Verizon Wireless to install hundreds of their remote control switches on the back up diesel generators at the cell towers in New Jersey.

This morning, the company announced ’06 revenues will be 70% higher than ’05- welcome news to investors.

What to do- here’s my advise. If you bought it right and you think you are a pretty good trader, go ahead and sell it even though there may be more upside in the stock.

This is simply a technical thought. I believe there is a lot more upside in the company in Q1 of ’07. More breakthroughs order wise could be in the pipeline.

If you are a buyer, which you should be because this is not over, here’s a chart which gives us our lower risk target entry level:

nihk21.gif

Note the 61.8% retracement I am so fond of brings us down to about $.055. That’s the level I believe you should accumulate the stock. You want to be a seller on days like today.

The stock is now making a serious of higher highs, which is very bullish. The next higher should be even higher than today’s $.083. If you want to make money on surging days like today, you have to buy it right.

Comments and questions are welcome.

Bad Toy’s Southland Gearing Up For Expansion

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Shortly after last week’s year end update on Bad Toys was published, the company issued another press release, which gives us a look at where they see themselves headed in 2007.

Bad Toys announced that the Industrial Board of Vernon, Alabama is going to build a 20,000 square foot facility to house Southland Health Care. Here’s a quote from the press release:

“This new facility will be 20,000 square feet and will accommodate the Company’s growth expectations to approximately $90 million in revenue.”

Here’s the big picture: Bad Toys spent 2006 treading water as they moved forward with their plans to spin out Southland Health Care into its own public company and attempted to refinance their defaulted debt.

Net result to shareholders: Bad Toys stock performance in ’06 was abysmal, as investors simply lost interest in the entire process.

Now that Bad Toys is very close to having an effective registration statement and possibly finding a non-equity demanding lender, we could be on the verge of having the interest rekindled.

I won’t put up another chart, as there is little change from the one that appeared in last week’s edition.

However, I will say that I believe Bad Toys is very close to having an effective registration on Southland Health Care, and being able to really go x-dividend- probably exactly one year after the original announcement. Once they announce an x-dividend date again, I believe the stock will trade up as investors acquire Bad Toys in order to be entitled to the dividend.

Comments and questions are welcome.

PhotoChannel: The Power of Many

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The OTC Journal goes out to a lot of investors, and since we have a pretty big reach we get some pretty good information before others get it. Sometimes, we simply have a competitive advantage on the rest of the investing public. This is the power of many.

I got the drop late this afternoon thanks to two of my sources who are watching for developments very closely.

For PNWIF, the CVS relationship earlier this year made a lot of believers, and this stock is developing a bit of a cult following. There hasn’t been a lot of demand lately, but there appears to be almost no supply. I think this stock is poised to move up- the market is just drooling for an excuse.

That excuse could be coming in the near future, thanks to what I learned today. One loyal supporter sent me the following link:

http://kmart.pnimedia.com/home.aspx

If you visit this web page, you will find it is the photofinishing order page for KMart. If you look at the bottom, you will find the following statement: “Powered by PhotoChannel Networks, Inc.”

There has been no formal announcement, but it appears PNWIF has now landed the KMart as a customer.

Look at this chart:

pnwif2.gif

This stock has been trading very well throughout this entire year. It has been nearly a triple off the level it turned in 2006.

I first brought it to everyone’s attention at $1.80. It closed Friday at $2.57. The stock has surged in price in the last couple of days. My target continues to be $4, and my SSL $2.10. At this point, I don’t believe $2.10 will ever come into the picture.

Buy this one before the rest of the market learns about the KMart relationship.

Comments and questions are welcome.

Commerce Planet Provides “Look”

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In my view, Commerce Planet put out its most telling news release since Q3 numbers came out this AM before the open.

The stock continues to trade extremely poorly relative to the numbers, and investors are scratching their heads and wondering why.

I, on the other hand, have stopped worrying about why. I’m pretty sure I know why- it’s because the early financiers are dumping their shares, and they have a lot of stock that is all eligible to be free trading. It could be in the range of 8 million shares, but I’m sure a lot of that has been sold already.
So, assuming this is the explanation for the poor performance of the stock, what’s the next thing to worry about?

The next thing would be corporate performance- aka sales and earnings growth. If they can keep up the blistering pace they set in 2006, this stock simply has to go higher eventually.

We are almost through Q4, and we haven’t known if they were keeping pace- until this morning. The company put out a news release stating it had enrolled an all time record of 3466 new memberships on one day- and that membership pace was at a new all time high. Of the $7.6 million in revenues the company generated in Q3, about $6 million was membership revenues.

Therefore, I believe it is now safe to assume that Q4 ’06 will be another record quarter for sales and earnings, - perhaps as high as in the $.09 to $.10 range EPS. One problem- we won’t see audited numbers out until at least the end of February- perhaps out to the end of March. At $.10 per share, you would have annual earnings of $.40 per share- you could make an argument for an $8 stock as absurd as it seems.

cpen2.gif

This chart is getting interesting. The stock is forming what technicians call an “ascending triangle”. It’s ascending because it has a slightly upwards bias, vs descending which would have a slightly downward bias.

As the highs get lower and the lows get higher, volume is drying up, and the chart is narrowing to a point. The longer it extends and the lower the volume, the more violent the move will be once it breaks out- or down.

In any case, as this stock continues to extend out in this tight range, it is probably setting up for a major move. The numbers would suggest to the upside, but I can’t say for sure. There is no doubt investors are losing faith and interest as the stock continues to fail to reflect its value based on corporate performance.

All this suggests the company simply needs to get better at getting its story out to the investment community. They need to reach way beyond the OTC Journal and reach out to money managers who have the capability to cleaning up the slop.

Here’s a link to today’s news release:

http://biz.yahoo.com/prnews/061212/latu062.html?.v=76

Comments and questions are welcome.

UpSnap: Anatomy of a Losing Trade

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I left my office last Wednesday morning for a trip to Dallas. When I left, UPSN was trading relatively brisk volume at the $1.30 level and looking like it could go higher. I was in a closed door meeting all day, but had heard it had reversed course a bit.

I came home Thursday night, and saw that the stock had really begun to trade very poorly. It was then I thought I might need to sell the 10,000 shares I had purchased at $1.22 on Monday, take a small loss, and move on.

I didn’t act, and regretted it deeply today. This stock has become a total disaster, and I am still holding the shares and down about 5 grand.

Here’s the chart- and it’s absolutely pathetic:

cpne2.gif

My technical call on the stock last weekend turned out to be a disaster. As you can see, for the first couple of days the stock trended up. Then, bam- this stock got killed.

This points out the importance of stop losses in these smaller issues. They can be very volatile, and as such you have to be careful.

In last weekend’s edition wherein I suggested this stock looked pretty good technically, I also set and SSL (suggested stop loss) at $1. When the stock rolled down through $1 on Friday I was travelling and wasn’t able to exercise my own disciplined stategy. Now I am stuck down another $3,000.

Since I missed my opportunity to sell the stock at a reasonable loss, I am going to hang in there for a few more days and watch what happens. Typically, when these stocks become this oversold, there is some sort of temporary bounce. When it happens (if it does), I will sell this one and get out with my loss.

And they say travel is not so expensive these days. That was one expensive trip for me.

Comments and questions are welcome. What a mess.