NWWV Pullbacks To Favorable Entry Level

For those who have been waiting for a favorable entry level, NWWV has cooperated. The stock traded up quite rapidly after the 3 for 1 forward split, and was overdue for a correction.

A weak market environment and profit taking have pushed this one down over the last couple of trading sessions.

The stock has arrived in close proximity to Leonardo Fibonacci’s perfect 61.8% retracement level. I compute that level to be $1.565 as measured from the beginning of the mid February surge. If you have been waiting for a favorable entry level, now would be a good time technically to add to or establish a position.

FMLY Out With Update

Family Room was out with an update on their production schedule this Friday after the close. I haven’t written about FMLY since early in January when they announced the upcoming movie with Travolta, which we now know begins filming in about one month. In addition, Friday’s news discloses James Gandolfini of Sopranos fame will costar in the film.

After the Travolta film, they begin another Segal film in April, and a third film in July starring last night’s Oscar winner Morgan Freeman.

Missing from the update was the current status of Edison, which will mark Justin Timberlake’s film debut. FMLY shot of bunch of new high action scenes for the film, and it is now tenatively scheduled for release in the Fall.

Also, currently in post production are

  • ANTS,” starring Dylan McDermott and Snoop Doggy Dogg;
  • “TODAY YOU DIE” starring Steven Seagal;
  • “SUBMERGED,” starring Steven Seagal; and
  • “THE WIDOW’S LOVER,” starring Willem Dafoe
  • The company is now in post production onfive movies, and has production starting on three more.

    88 Minutes, the Al Pacino movie which was scheduled to begin filming in January, has been delayed. I am informed it will still go forward at some point in the future.

    In addition, FMLY is working on a number of other new projects of a larger scope than those listed above. We could learn about a number of them in the near future.

    Why this stock trades so poorly and with such little volume is a complete mystery to me. They have more going on than any 10 small independent film producers, are unable to garner any interest in their stock.

    There isn’t really anything to say about the chart. The stock has traded between $.06 and $.09 for months, and currently isn’t showing any desire to break out of that range.

    It’s a source of great frustration for me and many who are reading this. The company is achieving greatness, but the stock is going nowhere. I have often thought of dropping it, but then look at the slate of projects they have in the pipeline. Conclusion- Perhaps the faith of long suffering shareholders will be rewarded some day. If they keep moving forward like this, it seems inevitable.

    NWWV- To the Moon Alice

    My quote provider finally adjusted the charting software for the split and the symbol change. I am now able to show you a chart of the stock performance. In the words of the immortal Jackie Gleason, the stock has rocketed “to the moon Alice”. If you don’t understand the reference, I suggestwatching reruns of the old Honeymooners sitcom. They are hysterical.

    The chart is a lesson in patience and having faith. To be a good microcap investor, you must have faith that corporate performance will eventually translate to high returns. Note that NWWV traded between $1 and $1.50 for a year before making this breathtaking run. During that time, the company was delivering a 700% growth rate. Those with patience are now rewarded.

    At this point it is hard to say whether the run will continue. I know it won’t keep going up forever. Assuming we attain the $2 level (currently $1.95) we still are only dealing with a $70 to $80 million market cap vs closing in on$1 million per month in high margin revenues.

    For those who are not on board this high speed train, a little pullback might provide a welcome entry point. Look for significant increases in the top line as the company moves forward on the roll out of the Auction Liquidators eBay drop off service, and the informercial with Bob Eubanks.

    MRKL Making Multi Month Low

    Markland Technologies has broken below the $.60 level today for the first time since the OTC Journal featured the company in early January.

    There have been some moderately negative developments in the MRKL picture since it was first featured. The most negative is probably the number of shares issued and outstanding. When I interviewed CEO Bob Tarini, he told me the fully diluted total number of shares was about 78 million. As of Dec 31, the company already had 90 million I&O, up from 51.5 million the previous quarter. Clearly, the market has been wrestling with the additional 40 million shares of stock, most of which have probably been already sold into the market. In short, if the company does not stop the proverbial printing press of stock certificates, this stock is destined to go nowhere.

    Secondly, there is a temporary industry wide problem. In checking with other companies in the Defense/Homeland Security arena, I have learned that the Pentagon is virtually broke at this time. Until President Bush’s $92 billion supplemental budget passes, new funding for programs from the DODare in danger.

    On the plus side, the company did deliver $17 million in revs in the December quarter, putting them on an annual run rate of nearly $70 million in annual sales. Taken against the current market valuation of $52.2 million, the stock still seems fairly cheap.

    A quick look at the chart shows a company who’s shares could break to a multi month low. The stock is in a downtrend, wherein the highs continue getting lower. On the plus side, the last two times the stock has retreated to these levels, it has bounced quite nicely.

    For those who own this stock in the $.70 to $.80 range, it might be time to look at taking your loss and moving on if the stock doesn’t bounce soon, especially if you were in it just for a trade.

    If you are a long term investor, the increase in the number of shares is much more troubling. Since none of us control management, we cannot stop them from issuing inordinate amounts of stock. The only way to vote is to sell and move on. Keep a close eye on this stock for further downside pressure over the next several days. If there is no bounce, it might be time to move on.

    VTSI Yo-Yo

    VirTra Systems went on Mr. Toad’s wild ride yesterday. The stock, which has been drifting lower in a newsless environment of late, got clobbered and then rebounded all in one trading session.

    VTSI traded to a low print of $.22, but managed to close at $.31 x $.32 for a $.01 gain on the day. Completely unfounded rumors were flying around that the company was losing business, going out of busines, etc. etc. It was all nonsense.

    It is true that new orders have slowed down at the company. The US Military has become their primary customer, and new military spending is currently on hold as we await the approval of the supplemental defense budget.

    Exacerbating the selling pressure was the company’s recent shopping trip for capital. The company has been putting out some feelers for funding requirements to finance future growth. The sleazeballs in this industry will short a stock to drive the price down in order to cut a deeper discount on the stock. The company has chosen not to pursue any of the pending proposals with new potential sources of capital. This might alsohelp explain the rebound in the price as any unscrupuloussellers could have been covering.

    Chairman Kelly Jones published one of his letters to shareholders mid day reassuring everyone that all the rumors were absurd, and that the company was fine. The stock came rocketing back. I hope none of you sold the stock in a panic as it traded to absurd lows.

    The company is on the cusp of some major new business, but is being slowed by pressures on the defense budget. Patience is a virtue in this case.

    The one year chart now has a very ugly glitch. As you can see, the long term uptrend was violated in nasty fashion to the downside, but the stock rebounded and closed .01 below the uptrend line.

    Where we go from here technically is anybody’s guess. If you’re nevous about the long term propects for the company just sell the stock and get out. Yesterday’s action was technically very negative. If, on the other hand you have some patience and are long term, hang in there.

    NWKI Breaks Wedge

    Shares of NWKI are not charging up the charts today, but the outlook technically is very favorable. As we highlighted in last night’s edition, the stock continues to trade in an uptrend which began last August.

    Today’s action on the heels of the news of the contract with Comcast has the stock trying to head higher up the charts.

    Since mid January the stock has been grinding sideways on lower highs and higher lows. It was approaching the point of the triangle you see in this rather short term chart. When stocks grind to the point of a wedge, they eventually either break one way or another.

    As you can see, in today’s action the stock has broken to the upside, but not with any real conviction. I’d like to see it take out the January high of $2.15, but that probably won’t happen today.Clearly there is some supply holding the market in check. Each higher volume pulse like today takes us closer to eating through the supply and moving to higher levels. Not a bad day. The uptrend remains intact. If you like the company, be a shareholder. The stock is behaving as if it will break in a meaningful wayat some point in the future.

    HYPD Rebounding

    HYPD has stabilized and appears to be on the rebound for the time being. The company was out with news last night after the close. HYPD described new results it was gleaning from old data. Using a new technology known as Prime View, HYPD has been able to determine that the first and only well ever drilled in the concession (1978) did in fact find natural gas. However, the new technology allowed HYPD to identify where the well should have been drilled for the best result, and a high probability the result would have been prolific.

    Natural gas on the coast of West Africa is simply not as valuable as oil. However, it is anticipated therewill be a tremendous local market developing for natural gas for regional customers. Two large bauxite mining operations are being developed in Guinea, and they willhave an enormous appetite for the fuel.

    Much is being made of the looming potential excess supply of stock which could be hitting the market on HYPD in the coming months. 960,000 shares came legible for sale in January, and 6.2 million become eligible between January and March. This stock has a cost basis of $.80.

    Just because the stock is eligible to be free trading, doesn’t mean the holders plan to sell. In fact, shareholders have only filed to sell 74,000 shares so far this year. That’s far short of the 900,000 that are already eligible for sale. Iplan to publish a comprehensive overview on this issue in a mid week edition.

    The chart shows a stock that is trying to break above its recent newly established downtrend line. I would like to see the stock break above this downtrend line with conviction. This would help confirm a trend reversal.

    I still believe the market is nervous about the potential excess supply, and hungry for news of exactly how the company plans to develop the Guinea Concession. However, the drop in the stock seems to be related to expectations of pending supplies of cheap stock, and the facts simply don’t support the expectations at this time.

    I have always felt this was the risky company we cover, but also the company with the most upside potential. Lately we have been getting a taste of the risk side of the equation. Maybe’s it’s time to see a little of the upside come back to the stock.

    HYPD Capitulation

    HYPD has completely fallen apart over the last couple of weeks, and the selling pressureand price drop has continued over the past two days.

    At this point in time, I have no fundamental explanation for the drop. To my knowledge, nothing has changed at the company and they are moving forward on several fronts to let investors know how and when they will begin the process of drilling their West African concession.

    I am hoping to get some information directly from the company for this weekend’s edition, but at this time there is nothing to report.

    In lieu of having nothing to report on the corporate side, let’s take a look at the technical picture:

    Here’s a very long term look at the chart going back to the summer of ’03 when this stock started its 1.5 year move up the charts.

    As usual, I have included both support/resistance and a trendline. Technically, there is nothing positive in this chart right now. As you can see, the long term trend line, which was breeched a couple of days ago, was broken decisevely to the downside. The stock paused for a couple of days right at Fibonacc’s 38.2% retracement level, and then disintigrated.

    I am very intrigued with the possibility of an exciting buying opportunity, but I believe caution is warranted at this time. Clearly, there is panic selling, and I would choose to wait until the panic is over before considering a buy.

    However, if the stock does drop to Fibonacci’s 61.8% retracement of$1.60 and holds that level, I might consider buying to take advantage of this weakness once we have confirmation that nothing has changed at the company.

    If you are a long term investor and just holding a position waiting for the Guinea concession to be developed, all this drama is nothing but a gut check. They are either going to develop the concession or they aren’t, and no one knows the final outcome at this point in time.

    Look for an update in a regular edition once I have some information.

    VTSI- Problem or Opportunity?

    VirTra Systems has been trading down into oblivion in the past month. In the fall, the company announced several major events which included a 17 unit order for the Mexican FBI and a very favorable conversion program for debt reduction. The stock broke out above the $.41 level, which had acted like a brick wall for months. I thought we were home free.

    Unfortunately and very disappointingly, the company has had nothing positive to say for weeks, and the stock has slowly been drifting down into oblivion. Based on everything I heard out of the company, I thought the news flow would pick up rather than slow down.

    This turn of events begs the question- Is this company now a problem?- or is this an buying opportunity? It is human nature to jump in when the news is great and the stock is trading up. Sometimes, the most money is made by those who buy when the stock is quiet and no one is paying attention.

    If you read Monday’s edition on Fibonacci Retracements, you might be interested in the current chart of VTSI:

    I drew both a trend line and Fibonacci retracement levels going back to the 2004 low of $.20. Note the stock is come down almost perfectly to both the trendline and the high probability 61.8% retracement level. Technically, for those who like to buy when they are quiet and no one wants them, this stock is trading at the perfect entry level.

    Since I haven’t heard a word out of the company in weeks, I have no idea if the news flow will pick up and if the company is working on delivering its big order to the Mexican FBI. If you have faith, now is the time to accumulate based on the chart.

    BPTR? Comments

    Members have been asking how the BPTR chart looks for a good entry level with regard to a Fibonacci retracement. Here’s the chart I put together in response to the question:

    The answer is no- the stock has not provided a perfect Fibonacci retracement level as an entry point. The chart begins with the current uptrend. Note there was an opportunity when the stock bounced off the uptrend line.

    However, in order to retrace to Fibonacci level, the stock would have to pull back to $.866 for a 38% pullback, and $.733 for a 62% pullback.

    This stock has been quiet for some time. It is due for its next attempt at higher levels. If you like accumulating when no one is paying attention, now might be the time. The longer it extends quietly to the right, the moreexciting the move once it starts.

    NWKI Research Report

     There was an eight page research report published on NWKI this morning. Interested parties should visit www.stockprofit.com and read this report immediately. There is some excellent background information on the growth potential in the  industry, and detailed information on NWKI.

    The volume on the stock has slightly diminished after a record last week. The stock did not break out to new highs, but remains in the uprtrend which began last August.

    As you can see from the chart, NWKI is forming an ascending wedge- As the trend lines narrow we arrive at the moment of truth from which the stock will break either to the upside or the downside. I’m betting it will break to the upside as the company should grow four fold this year.

    If you were looking for a short term trade, it probably isn’t going to happen this week. You need to expand your outlook a bit.

    If you are looking to take advantage of this moderately listless trading, the perfect level to accumulate the stock would be about $1.92- a 61% retracement from the short term move which began in December.

    Volume has been very listless market wide over the past week as traders awaited news from FED and the huge number of earnings reports. Skilled traders love these quieter periods to accumulate their favorite stocks so they are positioned for the next volume surge.

     

     

    AGSI Opens Favorably

    AGSI opened quite reasonably today, so I believe it is safe to go ahead and take a position without worrying about a short term correction.

    The stock could be setting up for a rebound phase after a dismal second half of 2004. One reason I’m not too concerned about the entry level is because the price is so low relative to where it has been before. It was a $4.00 plus stock last June when they first introduced the Radio Bridge, so the $1.60 level seems relatively low risk now that they are selling units.

    Here’s a longer term look at the stock. The drop below $1 in December appears to be an abberation, and the real support is around $1.20. As you can see, the stock has broken the recent downtrend line, suggesting higher levels could be in store. In order to really say there is an uptrend, the stock will have to find its way back above the late December high.

    The key to this idea will be consistency. The company needs to continue to deliver announcements of sales, so that investors can become comfortable with the company again. If you follow VTSI you know their problem is consistency- they deliver one big sale then nothing for two months. The stock trades poorly as investors lose patience.

    If AGSI can deliver consistent sales from here forward, the stock has plenty of upside.