September 11, 2002
Volume V, Issue 69
Email : [email protected]

To OTC Journal Members:

911 Anniversary Ideas

This past August 30th we published an edition sharing some thoughts on market direction for the remainder of the year. We stated we felt that after the August relief rally, the market would sell off in advance of fears associated with the anniversary of the Attack on America.

We also stated we felt there would be a post 911 rally assuming there were no geopolitical terrorist events to drive additional short term fears into the market.

The August relief rally on the NASDAQ took us from 1200 back to 1430. We then pulled back to about 1250, a level suggesting the lows were getting higher and establishing a short term uptrend.

We now believe, barring any international crises, we are setting up for a Post 911 rally which will take the NASDAQ back to about the 1480 level. Terrorist activities or war with Iraq would derail this scenario.

In keeping with this day of remembrance the OTC Journal is offering a couple of potential ideas for making money in the market if this rally materializes. The American spirit and our free enterprise system provide you with the right to risk your capital as you see fit. We have the greatest market system in the world. It is unstoppable by any outside force who tries to harm our way of life. Make or lose money, it is your inalienable right to make your own choices as a privileged citizen of the United States, the greatest country in the history of mankind.

When trying to identify a few ideas for the post 911 rally we liked Oracle (NASDAQ: ORCL), Hewlett Packard (NYSE: HPQ), Affymetrix (NASDAQ: AFFX), and SanDisk (NASDAQ: SNDK). You might have a look at each of these stocks. However, below are two we have chosen to feature:

Foundry Networks (NASDAQ: FDRY)

Foundry Networks is viewed as the one company which offers significant competition to Cisco Systems in the networking and router industry.

The company enjoys annual sales of about $300 million. It has $2.49 per share in cash, and made $5.1 million in profits through the first six months of 2002. 

As depicted in the chart, the stock has been in a solid uptrend since the July 24th low. A break above $9.50 would offer conclusive evidence both the highs and the lows in the current uptrend are going higher.

The MACD indicators we have provided are technical measures of momentum. In the upper chart, the diminishing red lines suggest the stock is about to break above the neutral line, setting up for a scenario technicians like on the long side. In the lower section the meeting of the two lines also suggest the stock is getting ready to surge.

Should the NASDAQ bounce into the 1480 range, we believe Foundry could find its way into the $11 to $12 range with a possibility of $14 with some luck. 

Traders with a short term time frame should employ a stop loss of about $8.25, or whatever percentage your risk tolerance is in the event the market turns against us.

Millennium Pharmaceuticals (NASDAQ: MLNM)

Any ideas for rebounding stocks have to include a Biotech offering. Both the pharmaceutical and biotech indexes have been destroyed in the Bear Market, and many stocks in these groups should be poised for appreciation in an improving market environment.

We chose Millennium because the stock sold off fairly sharply in sympathy with the pre 911 sell off, suggesting the stock could bounce back nicely once the pressure comes off. Millennium is developing new drugs which can be custom tailored for maximum effectiveness based on the patient's genetic make up. They are very involved in the new genomics technologies.

Despite a 47% increase in sales through the first six months of 2002 to the $160 million mark, this company is losing money. However, the company boasts $6.72 per share in cash, so they are well financed.

In an improving market the chart suggests the stock could easily rebound into the middle of the range of its last pullback, or about $13 per share. Should the NASDAQ find its way to the 1470 level, this stock could potentially achieve roughly the $16 level. A good stop loss on this stock would be the recent low of $10.40, or whatever your risk tolerance allows.

As with Foundry, the momentum indicators shown at the bottom of the charts are both turning positive, suggesting a short term move to the upside is imminent.

We were fortunate enough to provide two 30% profit trading ideas during the August rally: On August 10th we gave you Flextronics and Nvidia, both of which appreciated 30% over the ensuing three weeks.

Today's ideas could provide the same returns. Some things to watch out for: The market could be derailed by Greenspan's testimony before Congress on Thursday, Bush's speech to the UN on Friday, war with Iraq, or terrorist events.

Please note that none of the above risk factors has much to do with corporate performance. Should any of these events result in downward pressure on stocks, we would view this as a good buying opportunity.

It will still be some time before a new bull market is established, but in the interim there is nothing wrong with trying to make some money on the swings. Use caution- we are still in an overall Bear Market. Valuation is still hotly debated, and fund managers have itchy trigger fingers at the slightest negative sign.

Charts Provided Courtesy Of

The OTC Journal is a proud partner of the Online Investment Community. A next generation Online Analyst Exchange providing Members the ability to search, review, track and monitor some of the Internet's best Online CAs (CyberAnalysts). Members have the opportunity to potentially achieve higher returns by viewing top performing portfolios and receiving real-time alerts from favorite CAs. also has a lucrative incentive model for experienced investors and traders who consistently outperform the market. Share market ideas with other like-minded investors, establish a proven track record, provide insightful commentary, attract followers and ultimately become one of the Internet's highest paid and most sought after CyberAnalysts! 

Click here to receive your FREE 30-Day Trial Membership with no further obligation. Sign Up Today! 

The Newsletter is an independent electronic publication committed to providing our readers with factual information on selected  publicly traded companies. All companies are chosen on the basis of certain financial analysis and other pertinent criteria with a view toward  maximizing the upside potential for investors while minimizing the downside risk, whenever possible.  Moreover, as detailed below, this publication accepts compensation from certain of the companies which it features.  Likewise, this newsletter is owned by MarketByte, LLC.  To the degrees enumerated herein,  this newsletter should not be regarded as an independent publication.

Click Here to view our compensation on every company we have ever covered, or visit the following web address: for our full profiles and for Trading Alerts.

All statements and expressions are the sole  opinions of the editors and are subject to change without notice. A profile, description, or other mention of a company in the newsletter is neither an offer nor solicitation to buy or sell any securities  mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein.

The editor, members of the editor's family, and/or entities with which they are affiliated, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed in the newsletter.

The profiles, critiques, and other editorial content of the may contain forward-looking statements relating to the expected capabilities of the companies mentioned herein.


We encourage our readers to invest carefully and read the investor information available at the web sites of  the Securities and Exchange Commission ("SEC") at http://www.sec.govand/or the National Association of Securities Dealers ("NASD") at We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at Disclaimer ID:xG1jf4ll Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.

Unsubscribe Here

You can unsubscribe from this list at any time by Clicking Here and HITTING SEND. If you are having difficulty removing yourself or wish to change your address please go to


Click Here to View the OTC Journal Disclosure