December 8, 2000
Volume III, Issue 103
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To OTC Journal Members:

Important Market Comment

We believe the NASDAQ has finally hit bottom. There was compelling evidence in the trading activity of several bellwether technology issues this week.

Since Labor Day stocks have been selling off on good news and getting obliterated on bad news. Earnings disappointments yielded 40% to 50% sell offs. Earnings surprises to the upside also led to declines in stock values after the news.

This week there is compelling evidence to suggest these patterns have reversed. Technology stocks have been repriced as if we are entering a full blown recession. Evidence of a soft landing for the economy should yield higher prices.

Four stocks provide very strong evidence of a major shift in market patterns this week:

  • Apple Computer released an earnings warning- the stock went up.
  • Xilinx released an earnings warning- the stock went up.
  • Motorola announced an earnings warning- the stock was only down $.375 on a down day in the market.
  • Intel announced an earnings warnings- the stock went up $1 11/16.  Intel has dropped from $75 to $32 since Labor Day.
This pattern of technology stocks heading higher on bad news suggests stocks are ready to bounce. We still have a lot of damage to repair before the bull market returns. However, this week's action suggests we are past the bottom.

Microcaps probably won't begin to bounce until next year. Continued tax selling pressure and lack of interest will keep a lid on small stocks. We believe small stocks will begin to rebound by mid January. We should have good year in 2001 barring a full blown recession.

There are several factors which could derail the rebound- Continued uncertainty on the outcome of the Presidential election or an inflation warning statement from the Federal Reserve on December 19th. The Presidential Election is still up in the air, but the Fed seems concerned about a slowing economy.

Upcoming Editions

Between now and the end of the year we will be publishing individual issues and interviews with management of each of the companies we have covered this year. These will include:

  • Envoy Communications
  • Blue Zone
  • PawnBroker
  • Visa Gold Explorations
  • MedGrup
  • PhotoChannel
  • IQrom Communications
We no longer communicate with StockGroup, US Microbics, Engineering Power, Tropika, and NetSol International. These companies will dropped from coverage. We may continue to publish updates on NetSol International from time to time, but we don't speak directly with management.

These individual editions will serve as the year end wrap up for each of these companies. If you hold shares in any of them you can decide if you want to buy, sell, or hold. We will do our best to try to get unbiased information from management.

Trading Alert- Netro Corporation (NASDAQ: NTRO)

With the bottom in place we are going to be very aggressive with Trading Alerts on small and mid cap stocks for the remainder of December. There are some excellent values poised to bounce off very oversold levels. Please read the section on Trading Alerts at our home page to understand how these work. Click Here to go directly to that section. Click Here to view our Trading Alerts track record.

This weekend's trading alert is Netro Corporation (NASDAQ: NTRO). Netro is a provider of wireless networking equipment used by telecommunications service providers to provide businesses with high-speed telecommunications connections. They are involved in high-speed wireless technology.

The company has grown dramatically in the past year. September's quarterly sales were $20 million, up from $5 million the previous year. Netro also made a profit of $206,000 in the September quarter when analysts were expecting a loss of $.03 per share. Netro currently has nearly $6 per share in cash.

As depicted in the chart, the stock has been clobbered in recent months. At the end of September the stock was $70. It's been butchered along with all the other technology companies, and we believe it is technically poised to rebound next week. The 10 day moving average is $10.50, and the stock is now solidly above that number suggesting a trend reversal.

Trading Alert Details
  • Buy NTRO between $11 and $11.50. If the market gaps down on Monday morning this will represent an excellent entry level. If the market gaps up please wait until 10:00 AM (eastern time) to wait for a pullback. The election news makes the market very unpredictable.
  • One to Two week Target Price: $15 at the first stop, then $18. Longer term investors might see the stock fill the gap between $35 and $42 created in mid October.
  • Stop Loss- $10.25, and please use it.
In the interest of full disclosure we will mentioned that one of our editors purchased 1000 shares of NTRO in his own account at $11.47. He may buy and sell the shares anytime at his own discretion.

Next week we begin issuing our year end editions on the above mentioned companies.

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The Newsletter is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features.  Likewise, this newsletter is owned by MarketByte, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication.

Click Here to view our compensation on every company we have ever covered, or visit the following web address: for our full profiles and for Trading Alerts.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with  which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication.

The profiles, critiques, and other editorial content of the may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.


We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

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