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 way at some point in the future.
Network has been trading sideways at around the 2.00 level since Sept. 04. A problem I have with this stock is it’s lack of volume and also the insider sales. It looks like insiders want to sell whenever there are any buyers. Maybe with a new high profile CEO this will change.
Editor: I have seen very little evidence of insider selling. This stock simply needs to trade more volume. Over that same time frame, the NASDAQ has also traded sideways, especially this year. The new CEO should change everything, and the company is growing rapidly. I don’t mind holding stocks that don’t collapse when the company is moving forward.
I check sec.gov looking for the current annual mor quarterly report. I can understand that this might be delayed by the change in auditor. The longer it is delayed the more nervous I get. Why hasn’t NWKI at least filed the required form for “inability to file a required quarterly or annual report”?
Editor: The company’s year end is calender, and therefore their numbers aren’t even due to the end of March. Also, because of some of the unintended draconian consequences of Sarbanes/Oxley, public companies are now very restricted in changing auditors. Accounting firms have become extortionists over this new law, because even if you fire your firm, they have to sign off on all your filings if they did the audit and they can charge anything they want. I have heard stories of accounting firms charging $400 per hour to have counters doing inventory of labels. It’s all related, and of no concern for this company.