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URL : http://www.otcjournal.com
To
OTC Journal Members:
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Market
Comment |
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September has been a tough month.
The NASDAQ has dropped nearly 10%. Wall Street was buzzing with
anticipation for the resurgence of the Bull Market after traders and fund
managers returned from vacation in Post Labor Day work mode. As usual,
the masses were wrong and the market has acted exactly the opposite of
expectations.
The NASDAQ is range bound
between 3800 and 4400 with no sign a breaking one way or the other. We
are not technicians, but we talk to some very good ones. Expectations are
for this pattern to continue through September and into October. We are
looking for the Bull to return by November and give us another 15 month
run, just like the one that started in November of 1998.
In the short term look for the market
to surge back up above 4000. The excuse will be tomorrow's earnings release
from technology bellwether Oracle Systems (NASDAQ: ORCL), which
reports after the close. This week we had pre-release earnings warnings
for the September quarter. After the close tomorrow Oracle reports,
and they always beat expectations. This event will turn the market back
up. It will then find its way back up to 4200 or 4300, and then probably
come back down again. There are boatloads of cash on the sidelines, but
it is not finding its way back in for the long term.
Investors going bottom fishing over
the next 60 days stand to do extremely well if they hold until the Bull
comes back. In the interim the market will be choppy characterized by sector
rotation.
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PhotoChannel
Networks, Inc. (OTC BB: PHCHF; MSE: PNI) |
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Experienced micro cap investors have
an old saying: "Buy at the Wake, Sell at the Wedding". The performance
of PhotoChannel Networks this week is the clearest example of that
philosophy paying off.
We released our profile on this company
at $1.58 on May 12th. After a choppy June and July the stock capitulated
in August, and has been sitting at $.53 for the last month dead on the
screen.
If you liked the company and had
the courage to buy it when no one wanted it last week you could have nearly
doubled your money. The stock has exploded this week on huge volume. It
traded 93,200 shares today in the US and 462,762 shares on the Montreal
Stock Exchange.It closed at $1 US and $1.40 Canadian today.
PhotoChannel has recently
released a string of announcements concerning new management hires. They
are close to rolling out their online digital film developing service,
and the stock is being heavily accumulated. We wouldn't be surprised to
learn of a major positive development in the near future simply based on
the way the stock is behaving.
If you would like to learn more about
one that is hot right now, you can read the original profile by clicking
here, or go to the archive section on our home page.
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Blue
Zone (NASDAQ: BLZN) |
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Blue Zone, which is our current
favorite stock, dropped $1 this week. The company issued a press release
on Tuesday morning which we believe precipitated the drop. We also
believe the stock will head back up.
On Tuesday morning the company announced
that it had completed a private placement of $4 million with an additional
$1 million to be released once the underlying shares are registered.
Terms of the funding were not released
which probably explains the drop in the stock. Investors assume the shares
were issued at a substantial discount to the market causing a down draft
in the stock. It dropped 1/2 point each of the last two days on relatively
light volume.
We contacted the company to find
out why the terms of the funding were not released. We were informed that
SEC regulations prevent this information for being released until the registration
statement is filed.
The market should be in for a surprise
when terms of this funding are revealed. Time will tell. In the interim,
every time BLZN has seen $6 it has bounced nicely. Aggressive investors
should have a look at these levels. You may be buying at the wake, so that
you can sell at the wedding.
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StockTalkLive
Update |
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The official launch was Monday, and
guess what, it's not working. The system was designed to handle 1 million
simultaneous users, but the front end login process could not handle the
traffic load on Monday morning.
They are working around the clock
to fix the problem.
We spoke with management today and
they say it could be fully functional at any moment. Our expectation is
that it will be fixed by next week. If you are logging in and getting to
the white screen with the audio feed but no menu bar you are doing everything
right.
In the interim Do
Not EMail Us For Help. We don't support this
service. Email techsupport@stocktalklive.com.
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