To OTC Journal Members:
 

Market Comment- Close To Time To Take Your Profits

After a blockbuster ten day rebound, the market decided to take a breather today. If you invested in Nvidia (NASDAQ: NVDA) and/or Flextronics (NASDAQ: FLEX) which were recommended in our August 10 edition Relief Rally edition, now is the time to plan on taking your profits if you were looking for a short term trade.

In our August 10th edition, we stated we felt the NASDAQ was entitled to bounce into the 1475 range, regaining about 50% of the loss suffered in the steep May to July decline. We suggested Flextronics and Nvidia were two stocks poised to participate in the rebound. The NASDAQ hit 1427 on Thursday.

Today's breather does not mean this relief rally is over. The NASDAQ has closed up 6 out of the last 8 days, and was entitled to pull back for a day. Look for the summer relief rally to end before the upcoming Labor Day weekend, but we may bounce a little higher early next week. For now, the uptrend remains intact. Tuesday is a critical day. If the market sells off then, the rally is over.

Flextronics should be sold in the $10 range, up 30% from our entry level of $7.73 on Monday, August 12th. Nvidia should be sold at about $12, up 31% from our entry level of $9.10 on August 12th. If you are concerned and interested in protecting profits, sell immediately.

These recommendations only apply to short term traders. We believe there are several more hurdles before a new bull market is established. In better market conditions both of these stocks could command much higher values if you are thinking longer term. 
 

XML Global Technologies (OTC BB: XMLG)- Risk Level Drops Dramatically and Upside Increases

We had a series of great news releases from XML Global back in June. In fact, on the heels of the largest contract in the company's history, the stock traded over 5 million shares on June 20th, the largest volume day in the stock's history. On that day the stock traded to a high of $.28 briefly, only to be pull back for minimal gains.

Nevertheless, the stock remains in a solid uptrend, as depicted by the blue line on the chart. Since its rebound phase began in early June, investors who have been accumulating on the support line (depicted in blue) have had several opportunities to sell with nice profits when news drove the stock higher.

June's action in the stock may have cleansed the sellers enough to position the stock for higher levels. The company has been quiet recently, which is expected in August, generally the slowest month of the year.

However, even though the audience may be limited by vacationers, the company put out some news after the close which might yield another new high in the stock since the early June rebound phase got underway and the uptrend was established. We expect this news will result in a very positive response from investors, and hope the stock can finally find its way to a new level.
 
 

XML Global Announces $2 Million Financing

How would you feel about owning this stock in the $.22 to $.25 range if you knew institutional investors were willing to buy $2 million worth at $.20 per share? Also, the $2 million purchased restricted shares which cannot be sold into the public market for a period of a year or until the shares are registered.

Our guess is it would make you feel a little more secure about the potential for the investment. If you owned it you might consider picking up some more. If you didn't own it, you might want to take another look at this company.

Many small technology companies are desperately in need of capital in this investment climate. Most are dying, as there is simply no money around. Shareholders of XML Global should be ecstatic about this financing. Raising capital on these terms is an outstanding achievement and a strong endorsement of the XML's technology, and should serve as a signal for stock market investors to get serious about the stock.

As a reminder, this company is one of the leading developers of the next generation of software, known as XML (xtensible markup language) which will allow massive computer systems to communicate with each other. Currently, their main focus is on transformation products, which allows major customers to convert existing legacy systems without enormous expense. These transformation systems act like a kind of universal translator between legacy systems. (visit www.xmlglobal.com for more info)

Sales are the best in the company's history, and ramping up. They have survived a nasty downturn in IT spending, and their market is improving.

Today, XML Global Technologies announced they have received a $2 million financing. The company sold 10 million shares of restricted stock to Paradigm Group, LLC, a sophisticated venture capital fund. $1 million has been funded, the remainder is due at the end of September.

After a rigorous due diligence process, Paradigm invested in the company at a minimal discount to the prevailing market. With venture capital technology money virtually nonexistent, Paradigm's investment represents a significant endorsement of XML's future.

There are no guarantees Paradigm's bet will pay off. However, as an individual investor with a much smaller stake in the future of this microcap stock, you have to be encouraged by the amount of money your new co-shareholders are willing to bet. Also, this capital injection substantially reduces the risk of owning this stock, as the combination of increasing sales and a revitalized treasury give XML Global long term probabilities for success. This is huge news for long term investors, and could bode well for traders.

If June's high volume was successful in cleaning out the sellers, we may finally see the $.30 range hold up.

Here is the complete text of the news release for your review:
 

Labor Day Weekend Edition- Our thoughts on the market for the remainder of 2002.

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