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Trading Alert: Network Engines (NASDAQ: NENG)

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November 27, 2000
Volume III, Issue 100
Email : info@otcjournal.com
URL : http://www.otcjournal.com

To OTC Journal Members:

We hope everyone had a nice Thanksgiving. Next year at this time we hope to be thankful for the return of the bull market in 2001. It's been one of the ugliest bear markets we have ever seen since April. September through November have been particularly brutal. Many stocks have been cut down by 90%, and the desperation levels for the bulls are at an all time high.

We have reached the point where values are compelling. Everyone is now convinced no stock will ever go up again. One analyst noted that stocks are trading as if technology companies are going out of business. Now is the time for investors with courage to do some bargain hunting.

We plan on issuing a number of trading alerts in the coming weeks. Here is the first as a welcome back from the Thanksgiving holiday. This idea came from one of the hottest Cyber Analysts on the SwingWire.
 

Trading Alert: Network Engines (NASDAQ: NENG)

As you can see from the chart depicted below, Network Engines was obliterated in the last 90 days. The stock closed at $44 back on October 4th, and has since seen a low of $5.50.

We believe this stock is poised to rebound to the $11 level over the next week or two pending reasonable market conditions. If the market continues to tank all bets are off. This is why traders need to have a Stop Loss.

Network Engines, a leading provider of scalable Internet server appliances, reported net revenues for the quarter ended Sept. 30, 2000 of $18.1 million. This was up 25% from $14.5 million for the quarter ended June 30, 2000, and up 351% from $4 million for the quarter ended Sept. 30, 1999.

Furthermore, Network Engines currently has over $3 per share in cash. Trading at 2x cash, we believe this stock is ridiculously undervalued. Below find a ninety day chart on the stock, along with two MACD indicators, Stochastics, and Volume. Note that all indicators are turning up.


 

Trading Alert Details
  • Buy NENG at today's closing price of $7.125. If the stock gaps open in the morning please wait until at least 10:00 AM Eastern time or until the stock comes back into the low $7's before investing.
  • One to two week target price: $11 (13 day moving average over the past 90 days).
  • Stop Loss: $6.25. If the market does not like Wednesday's GDP numbers the blood bath could continue. If this is the case, traders will want to be out.
  • Longer term investors could see this stock go back and fill the gap that was created on November 8th between $22.50 and $26.


The OTC Journal is a proud partner of the SwingWire.com 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. 

SwingWire.com 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! 

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