Summer Relief Rally - Is It Possible? and Energy Power in the News

August 10, 2002
Volume V, Issue 60
Email :

To OTC Journal Members:

Special Announcement: Trading Alert Next Week

We're looking at a situation which may turn into a Trading Alert on Tuesday or Wednesday afternoon next week. Before deciding if you want to participate, please read the OTC Journal's section on Trading Alerts found on the left hand menu bar of our home page. For a Track Record of former Trading Alerts, Click Here.

Keep an eye on your inbox for an exciting opportunity in the middle of next week.

Summer Relief Rally- Is It Possible?

The market was up this past week for the first time in several months. All the major averages posted solid gains, taking investors by surprise. Some attributed this past week's performance to expectations of an interest rate cut when the FED meets on Wednesday. This seems highly unlikely, as 11 interest rate cuts last year didn't work.

Others attributed this week's performance to the absence of sellers. Overseas investors have been liquidating US equities for months, and they seem to have run out of stock to sell. Short sellers were conspicuous in their absence. They're probably all buying new mansions in the Hamptons and jetting around the world enjoying the billions in profits they have accumulated in the past 2 1/2 years. Wall Street pays off when you're right.

Despite the typical August seasonal lack of interest and pervasive doom and gloom, this chart of the NASDAQ Composite suggests we may be in for a summer relief rally.

This past week the NASDAQ broke up its' downtrend line (shown in red) for the first time since the sell off steepened in mid May, leading to three months of bloodletting on all the major indexes.

In addition, the NASDAQ has recently put in a double bottom. The second bottom was slightly higher than the first. Technicians will tell you this is a bullish indicator in the short term.

As long as the NASDAQ stays above the red line, there is a possibility of temporary rebound into the 1450 area. Of course, this will not change the long term downtrend. We believe the trend will continue until October or November, when a new, very weak, and very young Bull will be born.

Here are a couple of oversold trading ideas which may yield a short term profit if the market puts in a relief rally. This scenario may not play out, so use a stop loss as an insurance policy against a new leg down.

Flextronics (NASDAQ: FLEX)

Flextronics is probably the largest outsourced off shore manufacturer of electronic devices. OEM (Original Equipment Manufacturers) outsource their production to this company.

Formerly a profit powerhouse, the company's fortunes have declined along with the entire technology industry, and they are losing money at this point in time. However, the value is compelling at this level.

Annual sales run about $13 billion. At this price, the company is trading with a $4.2 billion market cap, or about 1/3 of sales. It is also trading at less than book value (liquidation value), which is about $8.62 per share.

The chart suggests a slight uptrend started in late June when the stock hit it's all time low of $6. If the market improves, this one may want to go back an fill the gap from early June, suggesting a good target price might be $12.

However, stay light on your feet. The company's fortunes are declining. A stop loss based on your risk tolerance is highly recommended.

Nvidia Corporation (NASDAQ: NVDA)


Here's a stock traders have taken out to the woodshed and beaten to death. The company designs and manufactures 3-D graphics processors and graphics processing units.

The company has a book value of $5.72, $5.45 per share in cash, and at current levels trades with a PE ratio of about 7. This company had an adequate June quarter, but announced the future looked bleak. 

In favorable market conditions this stock could rebound into the middle of the blue bands. This shows the average price since the stock began it current leg down, toppling from $24 to just above $9 in less than a month.

Most of the analyst community downgraded this stock once it reached the $9 level, which is a bullish sign as far as we are concerned.

Again, if you decide to roll the dice, a stop loss to minimize the risk is strongly suggested.

Energy Power Systems (AMEX: EGY) Back in the News

Energy Power Systems, one of our long term profiles, was back in the news for the first time in months yesterday morning. This stock was a big winner for us in 2001, yielding a profit of 60% to 70% for our members who sold towards the end of the year.

This year it has been all down hill for no apparent reason other than lack of news and horrendous market conditions. The company has not been proactively out in the investment community, choosing not to swim against the tide. They are waiting for calmer waters before proceeding.

Yesterday, just before the market opened, Energy Power made it first very positive announcement in some time. The company announced its Offshore and Engineering Division had been awarded $6.2 million in contracts by major energy companies operating in Atlantic Canada. Click Here to read the entire text of the news release.

We are expecting Energy Power to make a come back this Fall, predicated on the possibility of major new business. Stay tuned for more developments. The stock is oversold at current levels, and the company is doing well.

Charts Provided Courtesy Of

The OTC Journal is a proud partner of the Online Investment Community. A next generation Online Analyst Exchange providing Members the ability to search, review, track and monitor some of the Internet's best Online CAs (CyberAnalysts). Members have the opportunity to potentially achieve higher returns by viewing top performing portfolios and receiving real-time alerts from favorite CAs. also has a lucrative incentive model for experienced investors and traders who consistently outperform the market. Share market ideas with other like-minded investors, establish a proven track record, provide insightful commentary, attract followers and ultimately become one of the Internet's highest paid and most sought after CyberAnalysts! 

Click here to receive your FREE 30-Day Trial Membership with no further obligation. Sign Up Today! 

The Newsletter is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features.  Likewise, this newsletter is owned by MarketByte, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication.

Click Here to view our compensation on every company we have ever covered, or visit the following web address: for our full profiles and for Trading Alerts.

MarketByte LLC has been paid a fee of 125,000 shares of free trading stock of Energy Power Systems Limited for representing the company for one year. The fee has been paid by Fieldston Traders LTD acting on behalf of the company. The contract expired February 12, 2002. Marketbyte LLC currently has no contractual obligation or any shares of Energy Power.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed in the newsletter.

The profiles, critiques, and other editorial content of the may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.


We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Disclaimer ID:xG1jf4ll Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

Unsubscribe Here

You can unsubscribe from this list at any time by Clicking Here and HITTING SEND. If you are having difficulty removing yourself or wish to change your address please go to



The OTC Journal Newsletter is an electronic publication committed to providing our readers with useful information on publicly traded companies. The Newsletter contracts with publicly traded companies and receives compensation from them or third parties as payment for publishing information and opinions about the company and the trading market for their securities. Principals of the Newsletter may also purchase or sell securities of the companies in the open market from time to time. The positions, if any, that the Newsletter or its principals presently maintain in the securities of the companies are disclosed here (click here) and should be considered in making an investment decision regarding these companies securities. The Newsletter and its principals reserve the right to acquire additional shares or liquidate some or all of the positions they may hold in the issuer’s securities at any time in the future without further notice. These publications should not be considered to be independent publications concerning the company.

All statements and opinions expressed herein are those of the editors and are subject to change without notice. The Newsletter maintains editorial control over its publications and the companies profiled therein do not have any editorial rights concerning the information published about them. While we believe all sources of information provided by us and contained in our publication to be accurate and reliable, we cannot and do not guarantee the accuracy of information we received from third parties.

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at and/or the National Association of Securities Dealers ("NASD") at We also recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

The information found in this profile is protected by the copyright laws of the United States and may not be copied, or reproduced in any way without the express written consent of the editors of


You can unsubscribe from this list at any time by Clicking Here. If you are having difficulty removing yourself or wish to change your address please go to