eFoodSafety Finally Cracks and Joins the Rest

I guess it was inevitable. EFSF, which was the last hold out of this past season’s winners, finally succumbed to selling pressure, threw in the towel, and gave ground.

Frankly, I thought the stock made a valiant effort to hold up as long as it did while all the other small stocks around it were falling out of bed.

EFSF had been holding in the $.36 to $.40 range, a double from this past January. All in all, a pretty stalwart performance.

The stock start starting slipping on higher volume last Thursday, and continued selling off fairly aggressively through Friday and into this morning.

No doubt, the complete absence of news concerning fundamental progress out of the company over the last few months has been responsible for the recent drop in the stock along with a seasonally rough time for micros in general.

The company has four products worth getting excited about: Cinnergen- a natural product to control blood sugar levels; Cinnechol: A natural product to control cholesterol; Oraphyte: a natural product to control nematodes (round worms) in agriculture; and PurEffect: an acne skin cream product. There are several others the company is working on, but those seem to be the main focus.

Of the four, only one is commercially available, and I’m sure investors are getting impatient. Cinnergen is in stores and online- I have seen the add for it on CNN- sales must be growing for the product, and there is nothing but upside there. However, there hasn’t been any news for at least two months on Cinnechol, Oraphyte, or PurEffect.

Cinnechol was supposed to be available by now. Oraphyte is being evaluated by Dupont. PerEffect is supposed to be going to market via informercial, but there is no public information on the status.

So, is it any wonder that in a seasonally rough time, shareholders of EFSF are becoming a little impatient and the stock is getting hit?

So, where does that put us now? Here’s the chart:

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This is a daily chart going back to when the stock started behaving much better early in ’07 and the OTC Journal starting covering the stock. The first day, you could have picked up all you wanted in the $.20 range, so it’s still a 50% move from January- great by any standards.

However, if you paid up for the stock and you are still in it, you have to consider your options right now. My SSL was $.32, and it is trading below that level. If you haven’t sold and are interested in preservation of capital and willing to walk away, you need to sell now.

If you still like the company and where it is headed (we all hope), now you simply have to hang in there and take a longer term view.

I wouldn’t rush out to buy it today- I’d like to see it hang around in the $.30 range for a few days to convince me the “hot” money is out. This is the 61.8% retracement level, and the stock is likely to gravitate there for the time being.

Of course, then you run the risk that the company will come out with some market moving news, and the stock will be right back in shape.

I guess Rome wasn’t built in one day, so we need to have a little patience with this one. Typically, here’s what happens. You finally give up and throw in the towel, and then the company turns around and delivers big news after months of waiting. Isn’t that typical?

Most if not all of the damage has probably been done. If you haven’t sold, it might be a good idea to hold your nose and hang in there at this point. This one could get hot overnight- there are a lot of investors watching the story, and the company has a very loyal shareholder base.

Comments and questions are welcome.

Planet: Bottom In?

It looks to me like CPNE finally made a bottom this week and is ready to begin a serious rebound phase.

In the spirit of full disclosure, I started buying the stock today for my personal and corporate account, and will probably continue to do so. As I write this, so far I have picked up 5,000 at $1.36 in the personal, and 7500 in the corporate at about $1.345.

The stock looks really good to me- as I have been saying all along, something needed to change, and it looks like the change is here.

I don’t know if anything is going on behind the scenes beyond the sellers running out of stock and the buyers bringing the momentum back, but the stock is sure charging up the charts on strong volume.

Here’s the chart I put together- there are no retracement levels because the stock blew them all away, but there’s a couple of other indicators:

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The white line is the 10 day moving average – it broke above today which is very short term bullish.

The next line- the blue line- is the downtrend line from the top at $3.40 back in late January. I believe the stock will blow through that today, signalling a trend reversal.

The yellow line at $1.66 is the 50 day moving average. A break through that would confirm everything.

I am buying as I believe the drubbing is over. I am often wrong, but there you have it.

Comments and questions are welcome.

PhotoChannel Fails- Like All the Rest

PNWIF gave ground this week, dropping down to as low as $3.20 on a fairly robust 2 day sell off.

I was hoping this one would hold up going into the summer months, and thereby be positioned to go on to new highs in the Fall ahead of the rest of the gang. My hopes were dashed with this week’s action.

It’s all very funny when one considers this stock traded 800,000 shares in one day at $4.50 a mere one month ago as buyers piled into the stock when PhotoBucket was targeted by Rupert Murdoch’s News Corp.

Alas, the stock started drifting down on lighter volume about a week ago as Q1 numbers came out and investors were reminded this is still a fairly small company with a pretty hefty market cap.

Here’s the chart as I see it:

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Here’s a weekly chart going back to the beginning of this stock’s meteoric rise over the winter.

As you can see, as measured on a weekly basis, the stock has given back almost exactly 61.8% of its gains- generally my target entry.

The stock now needs to hold in the $3.25 range, or start trading back up. If it doesn’t, we can look at some longer term time frames to find the next threshold of support.

However, if it does hold, this may be looked at as a great entry level as the bar has been reset.

There are two facts related to PNWIF worth remembering- 1. The company just received $15 million in financing at $3.60 per share with a warrant at $4. Those fairly sophisticated funds are at risk at $3.60. You can now pay less than they did. 2. I originally suggested this one at $1.80 back in September- you should still be in pretty good shape if you picked it up in the $2s.

If this $3.25 area does not hold, you have to decide if you want to hold for the long term or sell and preserve your capital. As long as it hangs in here or starts up, it’s time to load up again.