Monthly Archives: February 2007

Gut Check Time on CPNE

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It’s gut check time on CPNE right now. The hot money continues to flow out of this stock, and it has fallen another 17% today.

This would be a good opportunity to remind everyone about the past two big sell offs in this stock. When looked back on, they both turned into very strong buying opportunities. I particularly remember when Q3 numbers came out. They were outstanding, and in the aftermath the stock dropped from $1.80 to $1 in two trading days. Look where we are now.

Here’s the chart, and it’s the absolutely perfect low risk retracement if the price holds in the $2.50 range:

Now, if this roughly $2.50 level holds, we should get a sustainable rebound. If we end up down into the $2.25 range, it will technically be a negative. It could signal lower levels ahead for some time.

It the meantime, I am trying to buy back some of the 10,000 shares I sold in the $3.40 range at $2.45- let’s see if I get filled. It is now bid at $2.50. I might have to raise my bid.

If you check the February 9 BLOG- you will see I called it a very strong buy at $2.40. It has cooperated.

If you like this one, and have been looking for an opportunity to pile in, now is the time. As I write, the bid is firming.

Comments and questions are welcome.

eFoodsafety Finally Pulls Back- Some Thoughts

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I’ve been a little behind on the content of late, but am getting caught up now. EFSF deserves some observations as my targets keep being blown away, and the strength of this stock causes me to continue to upgrade my target price.

My $.40 price target was breached two days ago, so if you sold the stock you should have made a great profit. Never look back.

This one has almost been too easy. There are a lot of fervent believers in this company, and now that it has woken up, so have many loyal shareholders. $1 is probably in the crosshairs sometime this year, but many feel much higher levels are in store further down the road.

Technically, this stock is behaving like a well trained hunting dog. It goes exactly where its master expects. Here’s a chart I published in the BLOG on Feb 9:

This is a very long term look at the stock- in fact, it goes back to when the company first traded publicly.- 2.5 years ago.

I predicted the stock was destined to get up to its long term downtrend line. That was a fait accompli. Where the stock went from there was technically far more interesting.

Here is the same chart extended out to today:

Look at the way the stock went straight to the downtrend line before offering any kind of correction. Absolutely wonderful.

So, where to from here? In my view, the key still remains in the long term downtrend line. If the stock can get through that line with vigor, it will signal a major trend reversal in this stock, and from there the sky is the limit.

I suspect it might take several efforts like those of the past couple of days to really breakthrough and breakout. In technical analysis, persistence breaks down resistance.

I believe it could take one or two more tries, but once we breach the downtrend line it’s going to get really exciting.

So- here’s what you really want to know. What do you do now? Good question. The company has not delivered much news of late. Any positive developments could send us much higher, and something is overdue.

Since the move has been so short term, here’s a short term look at the current good and perfect entry levels:

These retracement levels only cover the last six days, so it’s pretty short term stuff. Not to worry if these levels don’t hold up- we just have to look a little longer term.

According to the chart, $.44 is a good entry level, and $.395 is perfect. As such, I would now set the short term SSL at $.355.

The company is due to come up with something exciting in the near future, so if your not on board, don’t waste too much time.

Fervent believers are looking very good right now. I hope the company makes them look even better.

Comments and questions are welcome.

The Planet Descends- Where To From Here?

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CPNE took quite a drubbing today after the company came out with Q4 and full year guidance.

Personally, I believe the sell off is pretty ridiculous, and people are selling in typical knee jerk reaction. Anyone who has been following this stock for the last year along with me knows every time this stock has sold off violently it ended up being a great buying opportunity. The last time the company announced quarterly earnings, the stock dropped from about $1.60 to $1- what a buying opportunity that was.

I was half right in this past Wednesday’s BLOG entry when I predicted this sell off after the numbers came out. I thought the stock would run up higher on Wednesday, and I was wrong there. However, I was completely dead on about the post numbers sell off.

This is an event you can put in your experience file and remember it the next time a similar opportunity comes up. Anytime a stock runs up into an earnings release or some other anticipated event, it is nearly almost always a selling opportunity before the fact. This was no exception.

If you are wondering if this party is over, consider the following: CPNE will deliver $.18 EPS in 2006. Also, consider CPNE delivered zero EPS in Q1 ’06, and $.03 EPS in Q2 ’06. Therefore, CPNE delivered $.15 in EPS in the second half of the year.

Even if they move along at the same clip, they will deliver $.30 EPS in 2007. This suggests a much higher priced stock.

Here’s what the market didn’t like. There was $.07 EPS in Q3. Therefore, there must have been $.08 EPS in Q4- not as much growth as we would like. However, we have no idea if there were some non cash charges, and cash levels could have been considerably higher at year’s end.

I have a high level of confidence Q1 ’07 will be very strong. Someone wrote in it would be $.10- I don’t know where they got that information.

Nevertheless, this sell off is heaven sent for anyone looking to get more involved. Here’s the chart:

This only goes back a few weeks to the sub $2 level. It’s pretty short term. Therefore, thinking short term, I believe this stock is a good buy at $2.875, and a screaming buy at $2.50. New SSL- $2.25. I will update the table on the left hand menu bar of the home page.

I still believe this stock is destined for $4 plus and a NASDAQ listing. This pullback could be shallow and short lived.

Comments and questions are welcome.

Planet Strategy

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CPNE broke out yesterday on nearly a million shares of volume. So much for last week’s little bobble when the company announced major shareholders had sold two blocks to institutions at $1.90. Was it a good move on the company’s part? I believe that debate is over.

Unfortunately, the stock did not give a lot of ground and give investors an irresistible entry point. I believe pull backs are going to be shallow and short lived.

The stock is trading very well into Thursday’s big event- the company plans to issue Q4 guidance. The market clearly anticipates good numbers.

For those with a trading mentality, the current move in the stock could offer an opportunity to take some profits, and look for a more favorable entry point.

The stock seems to have resumed its pattern of trading up late in the day. Clearly, there isn’t a lot of supply.

Over the 20 years I have been trading stocks, certain patterns emerge which are fairly predictable. CPNE is behaving like any other stock where the market anticipates strong earnings. The stock trades very well up to the announcement, then sells off a bit, regardless of whether or not the earnings are strong.

If the company delivers good earnings and growth, the sell off is a buying opportunity. If it doesn’t, the sellers look smart.

If you are itching to take a profit in CPNE, today, and tomorrow pre news could prove to be your opportunity. This could be a trade able event.

Here’s the chart:

As you can see, the stock made another new all time high yesterday on a big surge. The company will announce Q4 numbers tomorrow. I don’t know if it will be pre open, or later in the day.

Nevertheless, if you like to trade, you should sell whatever percentage of your position you have in mind before the news comes out. Nine out of ten times, when a stock runs up into earnings, it temporarily sells off after the fact.

However- one word of caution- I definitely would not sell it all. There is no telling where this thing is going, but I believe north of $4 and a NASDAQ listing is a fait accompli at this point in time. Also- if you are simply a long term investor with no interest in short term trading, disregard this BLOG.

Comments and questions are welcome.

Planet Correction- Today’s Edition Inaccurate

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In today’s edition, I inadvertently published some incorrect information. I mistakenly read the press release to believe the company had issued 3 million new shares to institutional investors, when in fact the fund managers bought those shares from existing shareholders.

As I observed, the company didn’t actually need the money. Therefore, the sale of those shares is actually better as their is no dillution. Net result is the same- the institutions have their position.

As the company grows, the cost basis for early shareholders will continue to go up. That is a logical progression.

While the facts were wrong, the interpretation was essentially unchanged. These events are a mild negative for the stock short term, positive longer term.

Comments and questions are welcome.

Nighthawk Winning With Singles

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Baseball season is nearly upon us, so I can drag out the baseball metaphors. I’ve been getting requests for an update on NIHK, so I thought I would comply.

Not all major league baseball teams get to the World Series with home run hitters. The 2003 Florida Marlins come to mind- they became world champions with great pitching and by playing “small ball”- executing a lot singles, sacrifices, and hitting with runners in scoring position.

Since the big announcement of the cell tower installations in New Jersey, NIHK has been hitting a lot of singles. For example, NIHK has recently announced sales to City Water, Light & Power (“CWLP”) of Springfield, Illinois, Cotton Electric Cooperative of Walters, Oklahoma, and Denver-based Wisper Telecommunications.

While none of these are home run hits like the Verizon cell tower deal in New Jersey, these singles keep the base runners in motion and the score climbing.

Here’s the current chart:
nihk1.gif

You can see the first surge and then the second surge the stock made over the last 2 months. Each successive surge took the stock to a higher high.

For the last month the stock has been idling. It is extending out to the right with no major price movement.

As long as this stocks stays above this $.08 level it’s a buy if you believe in the future of the company.

If you accumulate it today you will be in a position to knock one out of the park when the company delivers the perfect pitch. A walk off homer if you want to take your profits.

In the meantime, the singles the company hits limit your downside risk and keep the top line moving forward.

I would accumulate this stock in here with a Stop loss if it trades much below $.08.

Comments and questions are welcome.

Planet Correction

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CPNE finally appears to be in a bit of a corrective phase. Long overdue.

If you are dying to buy some, here’s the chart:

cpne21.gif

This is my standard 38.2% and 61.8% retracement levels. First stop- $2.76- if it gets there it’s a buy. If $2.75 gives way, it’s a very strong buy at $2.40 or so.

In the case of CPNE, I think the $2.75 level will probably turn out to be a great buy, but you never know for sure.

Comments and questions are welcome.

eFoodsafety New High- Where To From Here?

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Technically EFSF is acting like a champ. Of late there hasn’t been much fundamental news, but the stock is simply taking off and made a new post OTC Journal coverage high today.

So, what are the chances of EFSF taking off like CPNE and PNWIF?- not just making post coverage highs, but making new all time highs on both the technical and fundamental side?

Let’s look at the fundamental side first. On the fundamental side this company will definately be making new all time highs on the top line. How do I know? Because they simply can’t go any lower than they have in the past. Cinnergen (look in the archive section if you want to read past articles concerning their products) is their first commercial product. It is being advertised nationally in short TV spots, and being picked up by retailers all over the place. By the end of March, they expect to have the product carried in over 10,000 retail locations.

Behind Cinnergen they have the Pur Effect product introduction coming, the Cholesterol product, and Oraphyte on the bio agri side. Therefore, it is reasonable to assume the top line will continue growing quarter over quarter for the foreseeable future.

This past week’s action in the stock makes the technical side very interesting. Frankly, it’s causing me to rethink the potential for the stock. Readers know I originally pegged the short term target price at $.30. It traded through that level far too easily and quickly, which caused me to raise the target to $.40.

This week’s action caused me to take a very long look at the possibilities, and here’s the big picture:

efsf1.gif

This is a weekly chart going back to when the stock opened for trading- at least as far back as my software goes. It measures the price movement week by week. The daily is too noisy to go back three years.

The blue line is the multi year trend line. As long as the company continues moving forward and the market for micros holds up, I believe this stock has a date with the trend line. At this point in time it would be around the $.50 level. The longer it takes, the longer the trend line extends, and the lower the price.

I believe getting to that trend line is pretty much a done deal. Far more interesting is what will happen when it gets there. If it can break the long term trend with volume and conviction it will be a whole new ball game and a dream situation.

One thing we have going for us- the company has no long term debt and no equity financing in place. It was all done some time ago, and it’s all over with. That is one reason the stock is trading so well.

Once the stock gets to the downtrend line I believe it will break out if the company is delivering catalytic events on the product introduction side.

Does this mean you should run out and buy it today at this new multi year high?- If you already own it or not, keep some money handy for a pullback, but a position at this level is fine as long as you realize there could be a correction again. Keep checking the BLOG for a good entry point.

Comments and questions are welcome.

Musings on US Energy

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US Energy- a mess nearly cleaned up, or still a nuclear waste dump that is still radioactive? That is the question many of you are asking in light of the stock’s recent attempts to behave better.

I am not convinced this stock is ready to begin a true rebound phase. While recent information flow out of the company seems very promising, it would appear the stock is not quite ready to take off like a sprinter.

USEI is in debt to the tune of about $2 million. According to recent SEC filings, the company is probably paying somewhere in the neighborhood of $150,000 per month in interest and principal.

I believe the company has the option to pay in cash or stock. If you look at the trailing financial statements, you can easily conclude there is no way the company has enough gross profits from sales to make the monthly payments in cash- yet. The way they are growing, that day will come.

I would guess USEI is issuing somewhere in the neighborhood of 2 million shares monthly to satisfy its debt obligation. If the stock trades 1 million shares per day, it’s a manageable number. The recent volume increases will go a long ways towards keeping the debt under control.

There is also the issue of massive supplies from early investors and those with a very low cost basis- that supply could be lurking.

The chart is definitely improving nicely:

usei1.gif

Here’s my standard 61.8% retracement chart. As you can see, the ideal level to jump in is $.096.

If you feel compelled by the story, and want to particpate while it continues to struggle, a position at $.095 would probably be relatively low risk in the short run.

However, I don’t believe the stock is ready for an EFSF type explosion. Numbers appear to be improving. I would like to see Q4 and Q1 ’07 results to see if the trend is continuing.
Longer term- the holy grail for this one is the 10,000 bus contract in Thailand. As soon as that gets rolling, so will the stock. According to the company’s press releases, they are in a pilot program now. When this program is generating big revenues they will be able to pay the cost of their debt in cash, and limit the massive supply of stock. I would guess this company will be at 200 million I&O in pretty short order.

Comments and questions are welcome.

Another New All Time High for Photo

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PhotoChannel is rocking again - off to new all time highs. It would appear no one is willing to let go of this stock, and it’s now well above my initial target price of $4.

To date- 144% return for those who acted when I first published back in September.

The stock is taking off again today, here’s why. I have just read a research report, authored by Michael Shonstrom of brokerage firm Emerging Growth Equities.

Michael has been rated a 5 star analyst 4 of the last 6 years by Zaks.

This week, he issued a buy rating on the stock with an $8 price target. I don’t know his time frame for his price target.

Here is a chart of the stock since I first re launched coverage after 5 years of silence at $1.80 back in September:

pnwif1.gif

What can I say. This chart is beautiful, but I wouldn’t know how to technically pick a top. When it trades high volume but stops going up, that will be the top. In the meantime, there doesn’t seem to be much supply here.

I am going to try to get permission to reprint the research report from the author. Stand by for more information.

Comments and questions are welcome.