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Don't Drink
the Kool-Aid; Part II |
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Well- based on this week's trading,
it would appear the party is over. You have to admit, we've had one hell
of a good six month run. Consider the majority of OTC Journal featured
companies since last August: CPNE from $.50 to $3.40; PNWIF from $1.80
to $5; EFSF from $.18 to $.50; NIHK from $.03 to $.11; TTGL from $.80 to
$1.40. These are extraordinary performances, and there isn't one company
on this list that isn't growing gangbusters and promising to deliver bigger
and better. Hence my warning- don't drink the Kool-Aid- stocks don't
go straight up forever, and there are times when your resolve and courage
are tested.
I believe there is a microcap switch.
Sometimes it is on, and sometimes it is off. For the last month, the microcap
switch has been turned off. Every stock you see listed above has suffered
some sort of correction. None of them have sold off on huge volume- it's
more of a buyers strike.
Is it time to cut and run? - dump
everything and wait for the mid August low to start accumulating these
stocks again or the next wave of little superstars I manage to find?
The answer- I don't know yet. I'm
not sure I'll ever call it perfectly. The switch could turn back on next
week. On March 3rd I predicted the NASDAQ Comp would sell off to about
2230, then turn around and go to 3,000. You don't want to miss that run.
The NASDAQ closed at 2417 on Wednesday, suggesting there is another 200
point drop ahead if my chart is accurate. Some of the above mentioned stocks
have already corrected as if the COMP had dropped to 2230.
In my view, it's all tied to oil
prices. In 2006 May to August was brutal. Stocks got clobbered. Do you
remember oil spiking to $77 while the Israelis and Hezbollah- entrenched
in Lebanon, were lobbing missiles back and forth? That was in the teeth
of the sell off last June.
The Iranians snatched some British
sailors, and oil is spiking again. If oil rolls over, stocks could resume
their upward climb, and the microcap switch will flip to the on position.
We'll explore this issue in more
detail over the weekend or early next week. In the meantime, stick with
your stops if you are a trader, and don't worry about it if you are a long
term investor.
I have checked with each of the companies
you see listed above. At the corporate level, they are all doing just great.
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Nighthawk
Systems (OTC BB: NIHK); Burrowing into El Paso Electric |
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NIHK was out with news pre
open today, and the release serves as evidence NIHK is due to have
a great year in 2007 as they evolve their business model and begin to get
repeat and larger orders from some of their early customers.
NIHK disclosed today that
El
Paso Electric ordered several hundred more of their remote power disconnect
units. El Paso has been a regular customer. Orders from the utility
that provides service for millions of customers are accelerating, and their
orders could get bigger with each successive PO.
However, embedded in today's news
release is a far more evolutionary and revolutionary component, which you
might not get without a little help. The news release discloses "Nighthawk
is developing a Web-enabled interface that will be used by El Paso to manage
the devices being purchased, in addition to the devices already purchased
by them."
So, what's the big deal? Why is it
an important new move for NIHK? Very simply this. The management
interface NIHK engineers are developing will be either managed or
licensed by the company- what does this mean?
In two words: Recurring Revenues.
Monthly management or licensing fees will be generated by this new internet
interface. Looking down the road, millions of installations yield substantial
monthly management fee billings. NIHK will become really profitable.
Also, the disconnect/reconnect feature of the devices will be easier to
use and manage- hence- greater sales.
Currently, the company is dependent
on sales to keep the top line growing. They've done a great job generating
those sales- when we see the final numbers I believe we will double from
'05 to '06, and probably double again from '06 to '07.
When I look at a chart, I always
try to find the prominent feature. The one feature most likely to dominate
of the zillions of technical indicators available to chart lovers. As all
readers know, my favorite technical indicator that can be widely used with
ease is the 61.8% retracement in a stock in an uptrend.
In today's look at NIHK I
found something else to look at- the resistance level. The stock has butted
up against $.09 twice in the last month, and if it can manage to
break through that level today, it could try for $.10 or $.11.
Persistence breaks down resistance.
The third time might be the charm.
I have revised my long term target
for this stock to $.25. By the time it has a shot for that level,
there will probably be 100 million shares I&O. This target is only
a $25 million market value. If they have installations in utilities
all over the country, and start penetrating markets like cell towers (the
Verizon contract), and large factory circulation systems (the DaimlerChrysler
order), $25 million is well within the realm of possibilities.
Even in a challenging market, the
very low priced penny stocks seem to be able to buck the trend. NIHK
is earning a loyal following, and today's news will probably bring buyers
out of the woodwork.
A move through $.09 might
get the stock really moving.
Here is the complete text of today's
news for your review:
| Press Release Source:
Nighthawk Systems, Inc.
Nighthawk Systems
Enhances Product Offering, Receives Large Order from El Paso Electric
Thursday March 29, 7:00
am ET
Web Interface Enables Easier Product
Use
SAN ANTONIO--(BUSINESS
WIRE)--Nighthawk Systems, Inc. (OTCBB:NIHK - News), a leading provider
of intelligent wireless power management and emergency notification solutions,
announced today that El Paso Electric has placed an additional order for
several hundred Nighthawk CEO700 remote power disconnect units as part
of a growing automation program at the utility. Nighthawk also announced
that, in conjunction with the order, Nighthawk is developing a Web-enabled
interface that will be used by El Paso to manage the devices being purchased,
in addition to the devices already purchased by them.
H. Douglas Saathoff,
Nighthawk's CEO, commented, "To put it simply, the easier our products
are to use, the more of them we will sell. The Web-enabled interface that
we are developing with El Paso will make it easier for El Paso and other
customers to manage and use Nighthawk devices. Customers that have a desire
to utilize thousands of devices like El Paso Electric need the ability
to easily track and activate the units and produce reports on their use.
This solution will allow El Paso to 'point and click' devices from a database
in order to activate them via Nighthawk and the American Messaging wireless
network."
Mr. Saathoff continued,
"We look forward to finalizing this program with El Paso over the coming
weeks, and rolling it out to our existing customer base during the second
quarter of this year. It is our goal to become much more than an equipment
vendor to our customers - we want to be a solutions provider for them.
Assisting with the automation process gives us the opportunity to become
partners with our customers as their programs continue to evolve."
Nighthawk's CEO700 gives
electric utilities the ability to remotely disconnect and reconnect power
to residential electric meters, saving them significant time and money
over the traditional manual methods requiring truck rolls and field personnel.
In September 2006, Nighthawk Systems and American Messaging announced they
had strengthened their joint marketing agreement to take advantage of their
core competencies and provide the best wireless remote control solutions
possible to their customers.
About Nighthawk Systems,
Inc.
Nighthawk is a leading
provider of intelligent wireless power control products that enable simultaneous
activation or de-activation of multiple assets or systems on demand. Nighthawk's
installed customer base includes major electric utilities, internet service
providers and fire departments in over 40 states. Nighthawk's products
also enable custom message display, making them ideal for use in traffic
control and emergency notification situations.
Individuals interested
in Nighthawk Systems can sign up to receive email alerts by visiting the
Company's website at www.nighthawksystems.com.
Forward-looking statements
Statements contained
in this release, which are not historical facts, including statements about
plans and expectations regarding business areas and opportunities, acceptance
of new or existing businesses, capital resources and future business or
financial results are "forward-looking" statements. You should not place
undue reliance on these forward-looking statements. Such forward-looking
statements are subject to risks and uncertainties, including, but not limited
to, customer acceptance of our products, our ability to raise capital to
fund our operations, our ability to develop and protect proprietary technology,
government regulation, competition in our industry, general economic conditions
and other risk factors which could cause actual results to differ materially
from those projected or implied in the forward-looking statements. Although
we believe the expectations reflected in the forward-looking statements
are reasonable, they relate only to events as of the date on which the
statements are made, and our future results, levels of activity, performance
or achievements may not meet these expectations. We do not intend to update
any of the forward-looking statements after the date of this press release
to conform these statements to actual results or to changes in our expectations,
except as required by law.
Contact:
Nighthawk Systems, Inc.
Doug Saathoff, 877-7-NIGHTHAWK,
Ext 701
dsaathoff@nighthawksystems.com
Source: Nighthawk Systems,
Inc. |
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