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GPS Industries
(OTC BB: GPSN): Due To Bounce Off Oversold Condition |
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There have been two short term trading
ideas offered up for the Santa Claus rally this month. Global E-Point
(NASDAQ: GEPT) was a huge success, yielding nearly a double in a few
trading days and looking like it could go higher from there.
GPS Industries, the idea covered
in the December
4th edition, has gotten clobbered in the last week. The price action
in this stock is a classic example of the old Wall Street adage of "buy
the rumor and sell the news".
The stock traded to about $.21 on
December 6th, and it has been all downhill since then. Here's a quote from
the original presentation: "There is no doubt this stock is going
trade gangbusters on Monday, but I have no idea whether it will be up,
down, or sideways. Likely it will be up in the early going, and then perhaps
higher from there if this news was not widely circulated."
Based on the way the stock has traded
since making the Monday high, there is little doubt traders were buying
out in front of the news that Greg Norman would invest $3 million with
the company. Once the announcement came out and the stock peaked, the sellers
arrived.
In a situation like this there is
a cascading effect. Once the stock reverses course, every short term investor
sells. If the stock drops low enough, the investors who just bought panic
and sell on the fear there could be something wrong with the company. This
action leads to a free fall. The greater the run ahead of the news, the
farther it falls after the news.
The market tends to emotionally overreact
in both directions. The stock had probably traded up a little too quickly
to deserve $.21, but has now dropped back down to a very favorable entry
level and is extremely oversold.
I believe the stock is ripe for a
bounce because it has now held its current level for a couple of trading
days, and the volume has dropped off significantly. Note the volume bars
at the bottom of the chart. They peak when the stock hit its high, and
begin dropping off as the volume drops. This volume component tells us
the supply from sellers is probably exhausted, and the stock is ready to
bounce.
In addition, the chart tells us the
stock has completed a nearly perfect 50% retracement of the major gains
it made from the end of October to the early December high. More evidence
of a high probability entry point.
Today, after the market closed, GPSN
contributed to the turn around picture by announcing a major distribution
agreement in Europe. UK based GEPSCO Ltd is going to market the GPS system
to the 3,000 golf courses in United Kingdom, Ireland, Spain, France and
Portugal.
The original run in this stock was
kicked off when the company announced they were opening a sales office
in Europe.
European distribution with a major
player opens a whole new market for the company and lend credibility to
their forecast for installation of 100 systems in 2005, which equates to
about $20 million in revenues.
I believe this news will help the
stock recoup at least 50% of its recent decline, puting us somewhere in
the $.18 to $.19 range near term. If the company can follow up with some
installation announcements, there is a possibility the stock could make
a new high. This is a bargain hunter's dream for an oversold bounce.
Here is today's press release for
your review:
Press Release Source:
GPS Industries, Inc.
GPS Industries Continues
European Expansion In Agreement With Leading UK-Based Golf Industry Distributor
Wednesday December 15,
4:01 pm ET
GEPSCO Ltd. to Market GPSI Products
in Europe's Largest Golf Markets
SARASOTA, Fla.--(BUSINESS
WIRE)--Dec. 15, 2004-- GPS Industries, Inc. (OTCBB:GPSN - News; FWB:252179),
a leading innovator of Wi-Fi wireless and GPS-enabled multimedia communications
and management solutions for golf facilities and residential communities,
has announced that it has signed leading European golf industry distributor
GEPSCO Ltd. to market the Company's Inforemer(TM) Wi-Fi GPS Golf Business
Solution in several of the continent's largest national golf markets. The
announcement was made by Robert Silzer, Sr., president and CEO of GPS Industries.
GEPSCO will market GPSI's
next-generation golf course products in the United Kingdom, Ireland, Spain,
France and Portugal, four of the largest golf markets in Europe, representing
more than 3,000 courses. The distribution pact with GEPSCO furthers GPSI's
strategic growth and position in Europe. GPSI has recently opened an office
in the UK, and purchased the exclusive patents to the use of key Differential
GPS golf technology in 11 European nations.
Already firmly established
with strong ties in the European golf industry, GEPSCO's distribution reach
firmly establishes GPSI's presence in the world's second largest golf market.
GEPSCO principals, Ben Porter and Phil Lewin, are both British Professional
Golf Association (PGA) members, and have been major forces in the European
golf industry.
"Ben and Phil were instrumental
in pioneering GPS technology to European golf," said Mr. Silzer. "Their
knowledge of both the game and the application of GPS to the business of
golf will help them quickly establish Inforemer in the important European
golf market."
"Inforemer is a state-of-the
art GPS system, ideally suited to the unique needs of European golf," said
Mr. Porter. "European golf courses will quickly recognize the benefits
this system provides not only to the game of golf, but their bottom line."
As the only GPS system to offer golf courses the choice of both handheld
and cart-mount GPS view screen units, Inforemer is ideally suited to the
European marketplace where golfers both walk the course and ride carts.
Moreover, Inforemer provides European golf courses with a wide range of
capabilities, including the management of tournaments and course facilities,
analysis and monitoring of course activity, customer relationship management,
the generation of revenue through remote food and beverage order placement,
the sale of multi-media advertising spots and internet access through Wi-Fi
hotspots.
GPSI is strategically
positioned to penetrate the European golf market having recently acquired
the exclusive patents to Differential GPS (DGPS) in Great Britain, Ireland,
France, Spain, Portugal, Italy, Sweden, Switzerland, the Netherlands, Germany,
Austria, Australia and Japan. With the recent announcement of the purchase
of the GPS golf patents in North America, GPSI now owns the patents for
all major markets in the worldwide golf marketplace.
About GEPSCO Ltd.
GEPSCO Ltd., is a leading
distributor of golf products and services throughout several European countries.
Based in the United Kingdom, the home of golf, GEPSCO distributes a broad
range of products and services to clubs and companies who are serious about
getting the most out of their golf courses. GEPSCO carries the latest,
most useful and most innovative products in the golf industry. Company
principals Ben Porter and Phil Lewin, both British Professional Golf Association
(PGA) members, bring a combined 30 years experience in European golf. They
introduced both GPS and digital video systems to the region, and have operated
several golf academies and facilities, including the esteemed David Leadbetter
Golf Academies.
About GPS Industries,
Inc.
GPS Industries, Inc.
(GPSI) develops and markets GPS and Wi-Fi wireless multimedia solutions
to enable managers of golf facilities, resorts, sporting events, and residential
communities worldwide to generate significant new revenue streams and improve
operational efficiencies. The company's unique and patented Inforemer(TM)
product line provides a complete GPS golf business solution, combining
a powerful backend management information system and revenue generating
modules with mobile color handheld or cart-mounted Differential GPS units,
seamlessly connected via a wireless, high-speed Wi-Fi network. GPSI's Board
of Directors includes legendary golfer and businessman Greg Norman. For
additional information on GPSI and its solutions, please visit www.gpsindustries.com.
Contact:
GPS Industries, Inc.
Nicole Croizier, 604-576-7442 ext. 136
nicolec@gpsindustries.com
Source: GPS Industries,
Inc. |
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