To OTC Journal Members: 
 

China Energy (OTC BB: CGYV): Trade Opportunity Close At Hand

China Energy's (OTC BB: CGYV)Q1 numbers came out Friday after the close, and if not properly understood, could create a great trading opportunity for my readers with an itchy trigger finger for profits, and a fantastic accumulation opportunity for those of you with a longer term perspective.

Last year, CGYV delivered $23 million in revenues, and about $1.5 million in profits. That was up from about $12 million in 2007. Outstanding growth, even in the global recession.

In 2009, CGYV announced it's backlog of contracts signed, sealed, and delivered in 2009 to be $32.5 million, thereby insuring another year of about 80% growth- another strong accomplishment. 

However, the Q1 numbers came out Friday, and the company delivered a mere $1.5 million in revenues, which at first look might be thought a major disappointment to investors. Therein lies the opportunity.

If one doesn't look a little deeper and quickly review the slate of recent press releases, it's easy to assume the company has fallen on hard times, and its fortunes have been reversed.

So, let's dig a little deeper. Here's what I can tell you. CGYV books its revenues when it ships out projects for delivery to the customer. If a major project happens to fall on the south side of the cut off line for the quarter, the company cannot book the revenues.

10 days ago on May 5, CGYV announced it had shipped a $4.85 million project to a customer in New Guinea. In the same disclosure, CGYV also announced those revenues would fall in Q2. 

Consider the facts. With the $4.85 million delivery in April, and the $1.5 million booked in Q1, CGYV will have generated $6.35 million in the first four months of the year, substantially higher than the previous year.

So, here's where the opportunity could lie. At the open Monday, there could be shareholders who see these quarterly numbers without the benefit of an understanding the revenues were simply a week later on the calendar. They might assume the company's business has been derailed.

You now know that is not the case, can CGYV will deliver a far bigger year in 2009 than in 2008, Q1 not withstanding. 

If the knee jerk reaction is a sell off in the stock, this would represent and outstanding opportunity for both traders and investors in my view. Consider the action in the stock last November as shown in this chart.

In early November the stock had been trading down for two months in conjunction with the worst ninety day blow off in stock market history. The stock finally made a volume and price crescendo blow off, and within three trading days CGYV reversed from $.90 at the low to a high of about $2.

Here's the lesson- opportunistic investors and traders saw their money appreciate 122% in just three trading days. Not bad. 

My suggestion is to watch this stock in the early going Monday morning. If the stock sells off, be ready for the smart money to pile in and take advantage of a bottom basement steal. 

I'll try to post a eLearning Video chart over the weekend for everyone's benefit. I suspect CGYV will make some sort of explanatory news release in short order. 
 

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