To OTC Journal Members: 
 

One For Two This Week

FrogAds (OTC: FROG) did not jump for us as I had hoped this week, but hang on for a bounce. From $.30 to $.28 is not a big deal. I suspect $.25 will be support for this one, and you might be well served to file a limit order with a tight stop to hop back in at $.25.

I'm not sure we'll get there, but if we do, that might be great level for easy money. The stock has not traded below $.24, so $.25 would be a great level to accumulate for the next bounce. Volume is coming down, which suggests the sellers are exhausted. The lower the volume from here forward, the more I like $.25.

Of the two options ideas I provided last week, one is just ripping to the upside, and the other is a break even. My Call on Call is climbing everyday, and this stock looks to me to have major upside potential even from here. It is clearly breaking out, and there are no sellers to be found anywhere.

CALL is the company that makes and markets the Magic Jack product you see advertised everywhere. $17 for a year's phone service. Investors I know who follow the company tell me their new generation of technology is far superior to their first version, and as a result they are expecting Q4 and year end results to be very strong.

The stock is behaving as if institutional investors believe it as well. This scenario is what I call an "Event Driven Trade". The event- a big earnings surprise to the upside. The trick- knowing how to trade it.

The key to trading a stock that moves much higher into earnings is to sell either just before the earnings release, or in the first half hour of trading after the earnings release.

Since the OTC Journal is committed to low priced stocks, I recommended the March $15 call options at $1.40. Today they are $2.25 for a gain of 60% in one week.

I don't believe this stock has peaked. Any correction should be used as an opportunity to add to or open your position.

Home Page : www.otcjournal.com
Email Questions or Comments To: editor@otcjournal.com