To OTC Journal Members:
 

Nighthawk Systems (OTC BB: NIHK): Looking for Love in all the Right Places

I haven't published an update on NIHK of late, and it's time, especially in light of some recent developments which look like they could bring this stock back into the spotlight.

For those of you who have taken the time to follow this, I suggested a stop loss in NIHK at $.09. Recall, we started with this one at $.10, it ran up to $.13 rather quickly, and has since been declining on light volume.

With the stock now in the $.08 range, it is time to revisit and look at their progress. If you have traded out at a small loss, no matter. In these days of $8 online commissions it is very easy to trade in and out of stocks with little cost.

Nighthawk has developed a line of products which have the ability to remotely turn any electrical device on or off. The switching mechanism can take many forms- it can be done on the internet, a cell phone, a telephone line, or any manner of wireless device. The technology runs on the same platform that pagers run on.

Earlier this year they inked a deal with Verizon Wireless- Verizon Wireless is marketing their products to utilities. They have a device that can remotely turn the power off and on at the meter. I was hoping we'd see some big sales out of the Verizon relationship by now, but it hasn't happened yet. For the right size utilities, these could be major infrastructure orders, and therefore the sales cycle can be quite long.

Patience will be required on the Verizon side. However, an entirely new line of business is developing which could head sales in a previously unforeseen direction.

Emergency alerting products over a wide geographic area is becoming a potential new direction for the company's business. The city of Denver is involved in a major installation of their products for audio emergency alarms all over the city.

The technology works off pager networks. Pagers are far more reliable than any other wireless technology. The networks are not overwhelmed as pager traffic has lost ground to cellular traffic over the past five years. The AAPC (American Association of Paging Companies) has been spending a lot of time in front of the FCC pushing for more reliance on existing and new paging networks for emergency notification. In a real emergency- i.e. fire storms, floods, hurricanes, tsunamis, tornadoes, etc, cellular networks, television, radio, and the internet can all be disabled. Paging networks still work.

NIHK landed its first contract in this arena with the City of Denver. In this morning's news release, it was disclosed Douglas County, Oregon has ordered a system to remotely control warning sirens in the event of a pending Tsunami. Other municipalities that have to deal with the likes of tornadoes, hurricanes, floods, fires, etc are expressing interest in the system.

This new direction could serve to keep both the company and the stock moving forward while we await larger contract flow from the utility side of their business.

Technically, I love the stock at $.08. As long as the stock holds up above $.07 (the 61.8% retracement line), the resurgence and uptrend in this stock remains intact. Perhaps I should have suggested $.068 as the stop loss level. Remember, the stock turned the corner into '06 at the $.04 level prior to announcing the deal with Verizon Wireless, so even at $.08 it has had a good year.

Bide your time on this little penny stock. The best could well be ahead.

Here is the complete text of today's release for your review:
 

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