I was in Europe for 2 weeks and fell a bit behind on my correspondence and blogging. When I returned I spent some time plowing through emails and BLOG comments, and was both surprised and entertained by the reaction of some investors to CGYV’s recent pull back to the low print of $1.50. Pretty funny stuff. This formerly hot China stock has cooled off considerably.

For those who are interested, you might want to check out this Bloomberg interview with the investment banker who financed the company. Click here to view the video. It was a pre Asian market open on Thursday, the 11th.

I don’t know why the stock pulled back like it did. I suspect it had a lot to do with a delayed reaction to Q1 numbers, which were admittedly abysmal.

One might easily believe the company, after three consecutive years of double digit growth, had fallen on hard times after looking at the Q1 numbers. After all, the company only delivered $1.5 million in revs in Q1- not much relative to expectations of more than $30 million this year.

This is of little or no concern for those who understand this company’s business model. It’s not the kind of company that delivers consistent daily sales. It’s a large project oriented company, that does a lot of work in house before delivering. Then, they get to book about 90% of the revenues. The rest comes over time.

The company delivered on a rather large project the first week of April which they had hoped and planned to deliver on in late March, so a big swack of revs won’t book until Q2, which should be a good quarter.

In the interim, I find it interesting that none of the whiners about this stock are making much of the $5 million financing the company closed. This was a convertible security, with a 9% coupon, that converts at a non adjustable conversion price of $1.80.

Consider what this means. This is a Hong Kong based fund. Their analysts went directly to the company and performed extensive due diligence. They came away with the impression they could make a significant return on their investment from $1.80 per share in CGYV. True, they get 9% while they wait, but if you wanted to put up $5 million, you might be able to get the same.

That’s the first thing. Second, and perhaps far more intriguing- what are they going to do with the money they raised? After all, if you look at the Q1 balance sheet, you don’t see any need for the cash- at the end of March they had $4 million in cash, $4.75 million in receivables, and $9 million in inventories against $2.9 million in payables- that’s pretty strong.

A recently completed waste heat recovery system for Zhejiang, China-based Mingye Chemical Fiber will add another $400,000 to the Q2 2009 coffers of China Energy Recovery (OTC: CGYV)…a quarter that should blow away reported revenue gained in the first three months of the year.

You see it’s all in the timing for China Energy. CGYV books its revenues when it ships out projects for delivery to the customer. If a major project isn’t completed prior to the cut off for the quarter, the company cannot book the revenues.

When CGYV delivered just $1.5 million in revenue for Q1, some investors saw that as a major disappointment. That’s because the $4.85 million generated from a completed project for a customer in New Guinea missed the cutoff for reporting Q1 revenue.

So, on top of the recent $400,000, you can add at least another $4.85 million to its Q2 revenue for at least $5.3 million. CGYV said its backlog of contracts signed, sealed, and delivered in 2009 to be worth $32.5 million, so who knows when the rest of that will come trickling in.

When Q2 earnings come out (I haven’t heard any dates yet), I’d expect the current stock price of $1.57 to shoot up as CGYV investors celebrate en masse.

CGYV is giving it the old college try to bust through the $2 level today on the heels of news concerning the delivery of nearly $5 million in orders for mining concerns in New Guinea.

However, as far as I am concerned, that is not the really big story. Aside from recent evidence the economy is going gangbusters in China, there’s some really big news about how China is planning to deploy the funds for their stimulus plan.

According to a recently published article on a China devoted web site, in the last three months the Chinese government has decided to allocate 23 billion yuan (3.37billion U.S. dollars) for energy saving, anti-pollution, ecological and environmental protection projects.

CGYV is planted firmly in the middle of all this new money with the best solution for factories, and stands to grow quite dramatically over the next two years from this funding.

To read the article, simply click here.
Technically, the stock is trying.  $2 continues to be resistance, and in light of recent news I simply don’t understand why anyone would sell this stock at $2.

This is the fifth trip to $2 in the last month, and higher levels are inevitable for this stock. Based on the chart, there’s almost no doubt. It’s simply a question of when. Forces are building behind the scenes every day for a breakout. Stand by, and stay engaged.
Comments and questions are welcome.

OK, I don’t know that my short clip is going to win any academy awards for ‘Best Picture of 2009′, but I think you’re going to like it if you haven’t seen it yet.

Yes, that’s right - the OTC Journal has taken another step towards making this site more engaging, entertaining, and informative. We’ve made a web movie of our thoughts and observations regarding China Energy’s (CGYV) chart. Now you can see what we think with a lot of live-action detail. We hope it’s the first of many site enhancements we’ll be adding in the near future.

Anyway, here’s the link to the appropriate page: http://www.otcjournal.com/China-Energy-Recovery-CGYV-on-Verge-of-Breakout/af/archive/20090415-1/ 

What do you think? Chime in below, as always.

Of the 8 small companies I have on my current menu of ideas, China Energy continues to be the one I believe offers the most upside potential with the least amount of risk. Why- check out today’s earnings release for 2008. Here are their achievements:

• Revenues up a mere 95.6% - $23.18 million in 2008 up from $11.85 million in 2007
• Gross profit increased to $5.07 million, a 138.2% increase from $2.13 million in 2007
• Gross profit margins improved to 21.9%, as compared to 18.0% in 2007
• Profits increased by 110.6% to $1.61 million in 2008 from $0.76 million in 2007
• Without the aforementioned non-cash expenses of $0.72 million, net income would have been $1.83 million, an increase of 185.9% over that of 2007.

Total shareholders’ equity improved to $7,623,445, up from a negative $213,989 in 2007
EPS came in a $.041. Without the one time, non cash pub co expenses, EPS would have been about $.086 per share

Ok- anyone you spin this, these are simply great numbers. When analysts finally catch on to this company, they will love the increase in gross margins. So, not only are their sales numbers rising quite dramatically, the percentage of gross profits CGYV enjoys from the sales is going up as well. This means the company will be able to generate higher profits on the same revenues.

Now, let’s look at the 4th quarter to help us figure out what’s going to happen in 2009. CGYV delivered $7.2 million in Q4, which suggest they are
on an annual revenue run rate of $28 million.

CGYV delivered $6.1 million in Q3- quarter over quarter growth was 18%. If they can keep up at that clip, let’s look at ‘09 numbers. CGYV should deliver $8.4 million in Q1, $9.9 million in Q2, 11.66 million in Q3, and 13.76 million in Q4.

CGYV could deliver $43.72 million in revs in 2009- another whopping increase of 88%. If gross margins stay the same, gross profits would come in at $9.6 million. Margins will increase as it won’t cost them any more money to be a public company. In fact, a bunch of one time, non cash expenses would no longer apply- I’d look for about $5 million in net profits, or $.17 in EPS.

If you still like the good old fashioned idea of PE ratios, in any normal market environment a company with a growth rate of 80% should trade at a minimum 40 times earnings.

So, if all this forecasting comes to pass, 40 times .17 would give us a stock price of $6.80.

All this perfect math can give you a guideline, but it rarely follows the play book. They are upside surprises and disappointments along the way. Nevertheless, the numbers are the numbers, and based on the numbers there is no recession going on at China Energy Recovery.

In fact, there is an enormous amount of chatter in the media about the $680 billion China stimulus plan, and a lot of chatter about a substantial amount of those funds going towards energy efficiency and cleaning up the environment.

Manufacturing is down in China in 2009, but what’s being done is going to the most efficient factories. Therefore, in order to compete, these factories need to retool, and what better way than with government subsidy money.

The chart is that of a stock just looking to break out on some sort of volume increase. I don’t know when that’s going to come. The volume has dried up, and there’s virtually no downside pressure at these levels. This stock is easy to hold when one simply looks at the corporate performance. Sooner or later the buyers will come, and this stock will be ready to surge.

It’s simply a no brainer. Sometime this year China Energy will go nuts, and I hope you are along for the ride.

Amazing what growth and earnings will do for a stock. At $1.50, CGYV’s price doesn’t seem like any big deal relative to the company’s performance.

However, consider the relative performance of the stock. Nearly every major average you can site- The DOW, S&P 500, NASDAQ, the Russell 2000- they are all falling through to new 12 year lows, and far below the lows set last November. Technically, at this point it’s impossible to call some sort of bottom.

However, CGYV, on a relative basis, is holding up pretty well. After all, the last time the Indexes traded to these levels, CGYV traded to a low price of $.90.

Today, CGYV is 66% higher than it was in November with all the major indexes falling to new lows. So, on a relative basis, that’s not so bad. Helping fuel the recognition for this issue is information found in the recent Obama quasi State of the Union address as follows:

“We know the country that harnesses the power of clean, renewable energy will lead the 21st century. And yet, it is China that has launched the largest effort in history to make their economy energy-efficient.”

China hasn’t exactly been the poster child for clean energy over the past two decades - its rapid economic climb led to serious pollution problems. But in the past couple of years the Chinese have been pressing on with an energy-efficiency campaign that is projected to result in hundreds of billions of dollars’ worth of construction upgrades by 2020.

Investors are beginning to realize CGYV is smack dab in the middle of the “hundreds of billions” in construction by 2020. Cleaning up the atmosphere in China is just beginning, and it will last a long time.

Look for another double in revs this year, with a push for $100 million in revs in 2010. When it translates into a higher stock I can’t say. However, eventually money will flow back in this direction, and when it does……

Comments and questions are welcome.

It’s time to explore what’s happening on both a micro and macro level at China Energy Recovery (OTC BB: CGYV).

First, the China Macro Picture.  There is a global recession, and it has had a very negative effect on the Chinese economy. Everyone understands this, and accepts it. Here’s the debate- is China going to come out of their recession sooner than the US, and has the recession been fully discounted by the stock market?

There are some early indications China will emerge from the recession sooner than the US. I believe when money starts to look for growth again, it will find it in China far sooner than it will in the US.

Back in November, China announced its own version of stimulus package, and it’s scope should be far greater than that of its US counterpart. In Beijing, they just decide to do it. There is no political wrangling or compromise.

Chinese banks are writing loans as they are not plagued with bad debt, and the government has implemented some major incentives for home purchases. New borrowing last month was double the previous year.

Furthermore, the Chinese are making investments in commodities to insure cheap supplies when the recession has run its course. They are investing in iron ore in Australia, and other areas around the world.

With regard to China’s initiatives in climate change, there’s some new and interesting information available. The Asia Society on US/China relations, based in Beijing, recently released a report aimed at giving the Obama Administration a new road map to enhanced relations on the climate change front. The report was  coauthored by John L Thornton, a Professor at Tsinghua University, and Dr. Stephen Chu, President Obama’s choice for the new US Secretary of Energy.

This document provides a blue print for collaboration between the two biggest energy consumers and producers of green house gas emissions.

Armed with a $700 billion stimulus package they can write the check for, the Chinese government has plans to commit significant resources to the reduction of green house gas emissions and the deployment of green technologies on all fronts to reduce future energy dependence.

That’s the macro picture. Now, let’s look specifically at China Energy Recovery (CGYV). The stock is currently what I would consider a “tweaner”. It’s somewhere between trading really well and trading extremely poorly.

The CGYV idea is now smack in the middle of a good idea and a money loser. As you can see from the chart, the timing for introducing this idea was absolutely the worst it could have been. Late September was the death knell for every equity, and CGYV was no exception.

We started at about $3, and in pretty short order a $.90 bottom was made as the company’s financiers simply blasted the stock with no regard for price. They had their own problems.

However, since making the $.90 bottom, the stock has delivered a 150% gain to its highest rebound level of about $2.25.

Now, the stock is kind of range bound in the $1.50 to $2 range. There seems to be sellers near $2, and buyers surface near $1.50. Volume is a bit lighter. So, while the market is trying to make new lows, this stock has gained back a healthy percentage of its loss. That’s not bad.
On the fundamental side, the company is achieving something no company is supposed to be able to do in today’s economy- it’s growing like crazy and making money.

Sequentially, ‘06 was $5 million, ‘07 was $12 million, and ‘08 looks like it will be about $23 million. That’s phenomenal growth with the ugly backdrop we have today.

You would think the company might slow down in 2009. So far, indications are the growth will continue. There’s no slow down at China Energy Recovery (CGYV).

They have booked about $30 million in business for 2009 already, and we’re not even 25% of the way through the year. I expect the company to deliver north of $40 million in 2009, and net $3 million to $4 million.

This is not supposed to be possible in today’s world.

As the China stimulus package finds its way into “Green Theme” strategies, China Energy Recovery is positioned to benefit in the extreme. Energy recycling and pollution is a huge problem in China, and CGYV is perfectly positioned for additional massive busines flow as funds begin to pour into energy efficiency and the reduction of green house gases.

The stock is going through a consolidation period. I hope it is being transferred out of “weak” hands who need cash today, into “stronger” hands who have a longer term perspective.

When money comes looking for growth in China “Green Themes” it will find CGYV. When the big money comes for this stock, I hope you are positioned to make a killing.

Comments and questions are welcome.

There’s lots of peripheral stuff to cover related to CGYV which is certainly worth a read. According the media, major shareholder Steve Westly did not get the nod as Secretary of Energy. However, Obama has chosen Nobel Prize Winner Steven Chu as the man to get the job.

Chu happens to be Chinese, which may or may not help. However, his views on the future of the “Green” Movement fit right into the CGYV theme. Here’s a quote:

“If I were emperor of the world, I would put the pedal to the floor on energy efficiency and conservation for the next decade,” Chu said.Tackling energy waste in residential and commercial buildings is a high priority for Chu. He said new designs and technologies in that area could go a long way toward improving heating, ventilation and lighting systems and reducing energy consumption. “Get rid of the wasteful habits and inefficiency and that by far and away will show the biggest gains in the short term,” he said.Chu lists examples of “hybrid thinking” to deliver more energy efficiencies such as cogeneration plants that capture waste heat while producing electricity, but says the dominance of coal-fired electricity is a big obstacle to progress.”

There’s another fantastic article on the future of Energy Efficiency as it relates to China that is a must read:Here’s a quote from the article:“Emission reduction and energy saving is not only an issue of environmental protection, but important to a company’s profitability, especially when the financial crisis deteriorates the economic situation,” said Gu Zhanggen, the Party secretary of the company.

Here’s a link to the entire article. It states inefficient manfucturers are closing down in China. Energy efficient and low pollution manufacturers are experiencing a boom.

http://news.xinhuanet.com/english/2008-12/12/content_10495880.htm

The stock traded sideways this week on lighter volume. At some point, this company is going to end up in the eye of the Hurricane, and the market will find out about it and come for it in a big way.

I wish I knew when it was going to be. The chart shows the stock has drifted back down near its support level:

We’re getting close to the end of the tax selling season, so I would expect the supply side on this one to become almost non existant pretty soon.

With their strong balance sheet, growth, and profitability, it is inevitable someone is going to come for this stock sooner or later, and when they do it will be very hard to buy.

Comments and questions are welcome.

CGYV is in a confirmed uptrend based on today’s action in the stock.

The company delivered an awesome quarterly report, and the Westly connection with the company is staring to come out. It’s not surprising investors want to own the same shares of a company owned by the guy who is likely to become the next Secretary of Energy-and, own them at a lower price.

Technically, here’s what everyone should be looking at:

As you can see, another big volume day took the stock up very nicely. It traded to a high print of $2.25 today, much more than a double from the all time low.

Also- note the stock is surging on high volume days, and pulling back on low volume days.  In short, the highs are getting higher, and the lows are getting higher. This suggests accumulation. The stock is quite volatile on any sort of volume as there aren’t a lot of forced sellers anymore- they seem to be all cleaned out.

The last big surge took the stock from under $1 to over $2 in two trading days. This one took the stock from $1.50 to $2.25 in one trading day. Nice move.

It pulled back in the last couple of hours of trading, and ended up right on the 38.2% retracement line.

As it stands right now, $1.80 would be the ideal place to accumulate, but you might have to settle for the closing level of about $1.95. If you don’t own it yet, I would take a partial position at the current, sub $2 level, and keep your powder dry for a move down to $1.80 in case it gets there.

The performance of this stock is a rare treat in this environment. It’s tough to find anything in a confirmed uptrend.

Comments and questions are welcome.

CGYV popped its big news pre open today, and so far it’s a bit of a non event on the trading front in terms of price movement. However, the lack of price movement tells you a lot.

CGYV has delivered a fantastic move over the past two trading days. It doubled off Tuesday morning’s low print of $.90, and traded as much volume in the past two days as the last three weeks combined. Someone was buying the stock, and buying a lot of it.

Today, the news of their monster new contract came out pre open. Great stuff. Little doubt the last two day run up was about this news as well as the high volume stop and reverse technical move.

Here’s the chart about 40 minutes into the trading day:

As you can see, the stock has given a little ground. Far more important that the price movement is the volume. So far today, it has only traded 31,000 shares- as compared to 300,000 and 500,000 over the past two days.

Clearly, this was a “buy the mystery” rally. What’s missing is a “sell the history” sell off. The buyers of the last two days so far don’t appear to be ready to pull the trigger on their profits yet.

I suspect those buyers are looking for much higher levels, which is a great technical sign. Nevertheless, since the stock is not trading up on today’s news, one needs to look for a pullback to accumulate.

Your 38.2% retracement would take the stock back to about $1.52. If it gets there, I strongly recommend jumping in for at least a partial position. $1.28 would be ideal, but that might be a bit of a stretch considering the damage that’s already been done.

Today’s volume tells me the guys with all the profits have no interest in selling. That says a lot.

Comments and questions are welcome.

CGYV’s one day massive move on huge volume was a nice surprise, but does it really mark a trend reversal, or was it simply on one day wonder that is likely to have limited follow through?

It’s a little too early to call.  There’s arguments both ways. I suspect it was the first day in what might have been a major direction change, but I only say that because the stock is so absurdly undervalued and the company is growing so rapidly. It makes sense. However, making sense is not enough in today’s world as irrational behavior abounds globally.

Since the stock is willing to back down on considerably lighter volume today, it makes sense to look at a chart for appropriate entry levels for those so inclined.

You can see the huge volume bar associated with yesterday’s dramatic rebound in the stock. Today, the stock is coming back down on far lighter volume, suggesting investor appetite to buy this stock has faded today from yesterday’s activity.

Perhaps there’s a little profit taking going on here from the $1 mark early yesterday. That’s a pretty attractive one day trade for those who were accumulating when the stock was quiet.

If you want to look at Fib retracements off the one day volume bar, I’ve included them. In the early going, the stock has delivered the first corrective leg- the 38.2% retracement. For those who are looking for a reasonably good entry level, $1.18 is your number. The price has already gravitated there.

If you are looking for the absolutely ideal entry level, $1.09 is your number. I don’t know if we’ll get there, but anything is possible in this environment.

Comments and questions are welcome.

CGYV was out with news pre open today, and it reveals a bit more about what they are capable of doing.

On the negative side, the stock is now trading at $1.30, which is a new all time low for the stock. Technically, it is still obviously wrestling with supply- it could be from more forced liquidations, or it could be from people who have been open market purchasers just throwing in the towel. Whichever the case, I’d like to see a few up days consecutively in the stock before suggesting it is any sort of a technical buy. Clearly, one big up day in the large cap markets is not going to right the ship in the small stocks.

So- just so we’re clear. For those who wanted to protect equity, my SSL was $2- so you should have sold it at that level. Technically, until the stock gets back into an uptrend, I would stay away. Fundamentally, if you want to buy the value and be long term, the stock is a buy right now at these levels. The choice is yours and you have to know your own style. If you have a six month window in time, I believe the stock is a buy.

Today’s news concerned the delivery of a boiler to a paper mill. The paper mills are the big polluters of the rivers. They are the ones who crank out the black sludge which gets into the water systems and wreaks havoc.

CGYV has solutions for that in addition to its solution for air pollution. CGYV designed and installed a boiler to solve the black sludge problem. According to the press release, the boiler can handle up to 160 tons of this black sludge daily. It takes the steam generated from the boiler, and turns it into 2 megawatts of power. The factory can also reuse some of the waste from the boiler.

As you can see from the chart, the stock simply continues to grind down a bit lower everyday. I don’t know where the bottom is, just as I don’t know where the bottom is in anything.

It seems there is probably about 50% more stock for sale than is being bought. The goods news- as long as the company continues to grow, the supply will eventually be finite and the demand can be infinite.

Right now, there is an imbalance and I can’t say when or if the imbalance will change. If the fundamentals keep improving, and growth money goes back to China, this idea will benefit.

Comments and questions are welcome.

Today, just prior to the market’s open, China Energy Recovery made an annoucement which opens a whole new line of interest as it relates to their business- it also helps explain their 110% annual growth rate the last two years running, and headed that way this year.

CGYV announced the following about one of the 2005 installations- the Two Lions sulfuric acid plant- the largest sulfuric acid plant in China.

It seems Two Lions has such a perfect environmental footprint that it has been awarded Carbon Credits which will equate to more than $2.5 million in extra annual revenues.

So, this leads to the inevitable question- What the Heck is a Carbon Credit?

Carbon Credits were established in the Kyoto Accord- a world wide doctrine signed by 179 countries which sets standards for carbon emissions. Under the Accord, emerging nations are allowed a certain quantity of carbon emissions. The concept is designed to mitigate the climatic changes from global warming.

The United States, under the Bush Administration, has refused to sign the Kyoto Accord, a move that has angered many friendly nations around the world.

All other major nations, including all of Europe, has signed the Kyoto Accord and adheres to its standards.

Under the Accord, emerging nations are allowed a limited carbon footprint. Within their respective countries, there may be industries that generate a positive carbon footprint, and others with a negative carbon foot print.

The industries with a negative carbon footprint must buy carbon credits through an exchange to equate to zero carbon. Manufacturers with a strong carbon signature can generate carbon credits that can be sold for cash.

According to the release, Two Lions is so fuel efficient it is generating carbon credits that will yield more than $2.5 million in cash payments annually. Moreover, as a result of the CGYV installation, Two Lions is burning 120,000 less tons of coal than it would without CGYV’s technology. That’s a lot of smoke in the air.

These carbon credits add a whole new dimension to the attractiveness of their technology. It’s another way for the installer to get a return on investment.

Yesterday was a very interesting day for the stock. I cautioned investors in an early BLOG the stock was trading poorly, and it might pay to wait for stabilization if you wanted to pick up some shares.

The stock was pretty much in a free fall yesterday until about mid day. This is an hourly chart from yesterday- each bar represents one hour of trading. Note the big down bars in the early sell off, associated with high volume.

At the end of the day, the stock turns rather abruptly up to finish much better on a nice volume surge.

As I suggested in yesterday’s BLOG, I suspect a couple of the funds who invested in the stock are dumping rather aggressively for reasons unrelated to the company. That’s just an educated guess.

They may have simply run out of supply, as the stock has traded pretty darn good volume for the past two weeks.

I’m not prepared to trust it yet. It will be interesting to see how it opens today and trades throughout the remainder of the session. I’d really like to see a couple of quiet days with very little pressure on the stock to be convinced the excess supplies have been absorbed.

For more information on Carbon Credits, Click Here. To read today’s press release, Click Here.
Comments and questions are welcome.

CGYV is trading rather poorly despite some pretty awesome numbers.

There were 7 million shares that became free trading as a result of the recent registration statement.

The majority of those shares were priced at $2.18 in the $8.5 million financing.

I made the mistake of assuming the majority of those shareholders would look at the numbers and be patient enough to look for much higher levels.

As it stands today, I was wrong. A lot of these funds are under quite severe pressure today to raise cash at any cost, and clearly CGYV has been vicitimized by a little short sighted pressure.

I believe there might be as much as 1 million shares for sale out of the 7 million that were registered.

In light of the continued pressure, I would guess the stock might trade as low as $2.10 to $2.20.

Therefore, I you are considering a purchase as the stock gets cheaper, I would consider waiting until it is clear the supply is exhausted.

If you are concerned about the reversal in the stock and the pressure, sell it and get out.

I would set the SSL at $2.

CGYV behaved pretty well today on the volume side. I would like to have seen a little appreciation on the price, but it’s a sign of the times.

If you have capital, and you have bought into this company, you are not a seller of this stock. If you are forced to sell because of your circumstances, or are focused solely on the market, you could be a seller.

If you are a seller, I suspect your timing might be bad, as the majority of the damage has been done out there in the stock market. Real revenues, real profits, and really valuable energy saving technology in a world where that technology is very valuable will eventually take this stock where it deserves to go.

There’s a couple of interesting items worth pointing out. For starters- this morning’s news release. The company announced a new contract for engineering services- admittedly very small by their standards, yet important for another reason. Note who is handling the services- MECS.

MECS is relatively meaningless to the average guy, but the name Monsanto (NYSE: MON) is not. MECS is formerly Monsanto Enviro-Chem Systems, and one of the largest designer and builders of manufacturing facilities in the world. It was formed in 1969, and was purchased in a management led buy out in 2005 from parent Monsanto. If you look at their office locations, they are a world wide firm. Click here to visit their web site.

CGYV is deeply entrenched with MECS, and obtains a high percentage of its business from the aformentioned world wide firm.

Here’s a second item for you to chew on. There was an interview published at CleanTech.com with Roger Ballantine, the most recent board member added to the CGYV management team, and one of the most respected names in the alternative energy movement.

Mr. Ballentine is a frequent lecturer at Harvard, and served under President Clinton as Chairman of the White House Climate Change Task Force and as Deputy Assistant to the President for Environmental Initiatives. The Clinton Climate Change Task force was the birthplace of Al Gore’s environmental movement, and led to the making of the movie An Inconvenient Truth. In the Alternative Energy field, this guy is the real deal, and highly respected world wide.

If you would like to read the interview with Roger Ballantine, simply click here.

Today’s action in the stock was pretty interesting. Here’s a chart:

There was a nice volume surge with no associated price appreciation. This means sellers were matching buyers 1 for 1.

This stock has now traded 1,018,198 shares since the company’s registration statement of 7 million shares went effective. The financing was done at $2.20- so $2.75 isn’t a really exciting profit- unless you think the world is coming to an end of course.

I suspect the number of shares for sale is probably in the range of 10% to 20% of those in the reg statement. Most of the players have very deep pockets and a long term perspective, but there are always going to be a few weak sisters.

If you average it out, and assume it’s 15% (just a guess), about 1 million shares of buying would clean this stock up and position it to move higher.

Assuming the volume is all double printed, which is a worst case scenario, this would mean the market has chewed up about 1/2 the existing supply.

So, here’s the point- keep an eye on the volume. If it holds up over 100k shares everyday this week, a break out is inevitable. If the volume slows down, the stock is likely to go into a slight pullback- probably pretty shallow.

I’m told there’s starting to be some chatter on this company around the internet. My hope is that investors look at the facts around the company, not the past. The past is over. It’s been a bear market, and the US is in a recession. There is no recession in China. Perhaps a slow down worst case.

I picked up another 5,000 shares for my own account today- I believe I’m going to make a fortune on the stock.

If you have any questions on the company’s numbers or technology, post them here. Comments and questions of an intelligent nature are always welcome. If you don’t like the company, go ahead and tell us why, and I’ll publish your comment with a response.

The turmoil on Wall Street with the LEHMAN bankruptcy and the AIG fiasco has the markets reeling this morning and stocks selling off.

In my view, this is fantastic news CGYV has provided a very favorable entry level for those who have an interest. The entry level is very favorable today. I would stay disciplined, but if you like China Energy, now is the time.