To OTC Journal Members:
 

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No new BLOG entries since last week's turnaround with three profit taking recommendations. The weekend edition has turned prophetic as I called VTSI as a stock that was absurdly oversold and due to bounce. Like a trained hunting dog, the stock obliged this week. An update on VTSI is provided below.

To use the BLOG, simply go to the home page at www.otcjournal.com - the BLOG will scroll down automatically on the right side of your screen. The most current journal entries appear in the middle of your screen. Check back frequently for updates particularly when stocks are moving to overbought or oversold levels or in volatile markets. Your questions and postings do not automatically appear, so don't bother posting the same question multiple times. I personally go through to moderate and respond to every question.
 

Virtra Systems (OTC BB: VTSI) Rebounds Big Time

I'm feeling a little better about stocks in general these days. Those who read the weekend edition know I recommended taking profits in three OTC Journal ideas last week. 

I also selected two stocks out of our small universe as candidates for the next strong bounce. One of those ideas was VTSI, and as you can see from the chart the stock obliged in a big way. The other selection was NWWV- watch for developments from that company next week.

VTSI rebounded significantly courtesy of the announcement that the company had completed its first major installation at Fort Hood on behalf of the US Army. In the press release, several officers involved in training programs at Fort Hood were gushing about the quality of the Judgemental-Use-Of-Force simulators. Click Here to read the release.

Virtra followed up with a new contract announcement today. They completed the installation of an Immersa Dome project on behalf of a major pharmaceutical company. The press release does not specify who it was, but I can tell you it was a major household name. The presentation is being used at conventions to demonstrate a new drug they have in development.

After months of extended silence VTSI is gaining traction once again. The stock has been in a nasty downtrend all year as the company awaits new order flow.

I can't give specifics on what they have been promised. However, I can tell you that if the orders materialize as promised, shareholders will be ecstatic. A branch of the US Military has verbally promised huge order flow. Funds from the recently passed $100 billion supplemental budget are earmarked for the smaller Phase I, and the larger Phase II order should come from the '06 fiscal budget in October.

If these orders materialize, I would not be surprised to see VTSI bought out at some point in the future. To view the latest versions of their virtual reality Judgemental-Use-Of-Force simulators, visit their web site at http://www.virtrasystems.com/. 

The stock could pull back a bit after this strong three day rebound, but I would view that event as more of a buying opportunity for the high risk end of your portfolio, especially if it pulls back on low volume.
 

Family Room (OTC BB: FMLY) Starts Another Production

Family Room announced they have begun filming another feature movie. This film does not have a high profile cast, but does have an interesting twist. FMLY is co-producing this film with Lionsgate (NYSE: LGF), a partnership which insures strong international promotion and distribution.

The film, entitled "Borderland", is a horror film based on a real historical event. It's a story about three college friends on a road trip who end up on the wrong side of an ancient cult in Mexico. It will be filmed in and around Tijuana, and the filming has already begun.

Tonic Films, the developer and co-producer of "Borderland", was responsible for "Cabin Fever". Cabin Fever was made for $1.5 million, and grossed over $40 million at the box office internationally, and $47 million in DVD rentals and sales.

Details were not disclosed, but FMLY will receive a fee for producing the film, and has negotiated a percentage of the producer profits. 

Nothing has changed concerning my views of the future of this stock. If you didn't read my last edition on FMLY and you are interested, you should do so now. The May 28th edition can be accessed by clicking here.

I still believe FMLY has turned into a good company with a lot of upside potential, but it is still a weak stock, and could continue to be so until something changes. Stocks and companies can often be two different things.  Since many of you emailed me indicating you were prepared to hold for the long term, I will continue to report events and work with the company for some change.

Click Here to read the press release.

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