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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.
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.
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
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
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