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NetSol International (NASDAQ: NTWK)

Last Friday we issued a short term trading alert on NTWK with a target price of $30 to $35 by the end of next week. The stock closed at $25.375 that day.

We noted that there was a possibility the stock could pull back today in sympathy with the last trading day of the month. Short Sellers are stuck in this stock with no exit strategy, and they have repeatedly hammered the stock on the last day of the month to get a low closing price for brokerage account statements. This practice is known as "Painting the Tape".

We also noted that the anticipated move in the stock is based strictly on rumors. We have heard that there will be new institutional sponsorship accumulating a position. This stock trades thinly and moves dramatically on light volume. A surge in buying could move the stock up prolifically.

Any weakness in the stock near the close of market today could be viewed as a buying opportunity. Traders should keep a close eye on the stock. After today the stock could trade up nicely. However, use caution. Our thoughts are based on rumors which can be unreliable. If the stock does not trade well next week set a tight stop loss if you are strictly short term.

In the interest of full disclosure we remind you that one of our editors owns 2500 shares of NTWK in his own personal account with a cost basis of $25.17. This should be viewed as a conflict of interest. He has permission to buy or sell this stock at any time at his own discretion.
 

PawnBroker.com (OTC BB: PBRR)

We have received a lot of questions on PawnBroker this week. The symbol changed to PBRRE, and then back to PBRR. 

The "E" at the end of the symbol signified that the company had filed for a two week extension to file their June Quarterly Financial Statement with the SEC. On Tuesday the company filed its report and the "E" was removed.

Market Makers used the "E" change as an excuse to drop the stock from $2.875 straight down to $2 with no associated selling volume. The Financial Statement then was released, and it made the company look as if they were about to file for bankruptcy.

Investors need to remember the June numbers are a snapshot of the past. Since the end of June the company has received $2 million in additional funding and now has a $24 million equity line of credit they can draw down on anytime they wish. The company's need for cash is past.

Shareholders also noted that the company has yet to generate any revenues. We knew this was the case. The company will not generate any revenues in the September quarter. Revenues will begin in the 4th Quarter of this year.

The company then released news that it had hit the milestone of having 1,000 Pawnbrokers registered and putting inventory up on the site, which they had promised all along.

The true test for this company's business model will start to come this Holiday buying season.  If the public shops the company should succeed.

Our views on this company have not changed despite the unfortunate drop in the price of the stock this week. Of greater concern is the $3 ceiling on the price. The stock made numerous efforts to break through that barrier, and was knocked back each time. It will be interesting to see how it behaves the next time it gets back to $3.

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