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To
OTC Journal Members:
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Trading
Alert: NetSol International- NASDAQ: NTWK |
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On August 9th we published a short
term trading alert on NetSol International, our favorite stock of
all time. The stock closed at $26.875 that day. We projected
that the stock was destined for $30 short term. On August 11th the stock
traded as high as $31.125, and closed at $29.375.
In our opinion this stock is now
set up for another surge, and this time we are looking for higher levels
over the next two weeks. We anticipate a surge into the $31 to $35 range
in the next two weeks.
Rumors abound that new institutional
sponsorship is going to begin accumulating a position in the stock next
week. The stock trades up or down quite dramatically on fairly light volume
as there is almost no public float for investors to compete over.
Of the 3 million shares publicly
traded, over 2 million is held by one hedge fund, and several other fund
managers have taken positions since the company was added to the Russell
2000 in early July. Publicly traded shares of this stock are in very short
supply.
Short sellers have been frustrated
by the stock's stubborn failure to collapse. If you spend any time on the
message boards at either Raging Bull or Yahoo! you will note that the level
of desperation by the negative posters is at a new all time high.
The stock is set up for a nice rally
if new buyers appear on the scene as predicted.
The reported short position in the
stock is over 300,000 shares. Sources close to the trading activity in
the stock believe that the unreported naked short position could be easily
double that.
One of our editors that has been
covering this stock on behalf of the OTC Journal since we first
released our profile bought 2,000 shares of NetSol with an average
cost of $21.75 in July. He then sold it during the August 11th surge between
$29 and $30.
In the interest of full disclosure
this same editor now has repurchased 2400 shares in the open market at
an average cost of $24.90. He is looking for over $30, and more like $35
by the end of the first week of September. You must assume that he will
be a seller at higher levels, and this may be viewed as a conflict of interest.
He has permission to buy and sell the stock at any time at his own discretion.
The only hope for a lower price will
come on Wednesday and Thursday. Short sellers have a habit of trying to
knock this stock down for the last day of the month, which is next Thursday.
They want the price lower for published brokerage statements. This practice
is referred to as "Painting The Tape", and can be a very useful
money making tool when properly understood.
We were right about a surge in this
stock earlier this month. Based on what we are hearing, the next surge
should be longer and more sustained. This idea in not based on fundamentals,
it is only a short term trading alert for those that like to trade aggressively.
Our thoughts are also based on rumors, and rumors can sometimes turn out
to be false or misleading, so you might consider a tight stop if you choose
to act on this idea.
If we hear more we will keep you
informed. This stock could lend a little excitement to what it otherwise
a lackluster week. Activity will pick up after the Labor Day Holiday weekend.
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