You Have To Own HDY

To say the least, it has been an interesting week for HDY. The company issued a press release describing in detail how their Guinea project had gotten derailed from crooked internal politics. I have never seen disclosure like this from a public co. It reads more like a John Grisham novel than the real world. Click Here if you want to check it out and didn’t catch it.

It would appear the game is back on in Guinea, and HDY has some very compelling seismic data and core samples from the concession.

I believe the company is signalling the market that it is on the cusp of getting the permits to drill test wells. This will be the first step in the process of restoring the project.

My guess is that HDY is going to announce they have received drilling permits in the near future- my guess is anytime between tomorrow and the end of the year.

I believe an announcement of this type will probably add $.50 to $1 to the stock- I don’t know if it will be a spike or it will hold. I know if I am paying attention when it happens I will be a seller of some or all of the 20,000 shares I have accumulated for my own account, and be looking to buy those shares back.

I believe if you don’t own some of this stock, you should own it now. I am recommending an event driven trade, and in event driven trading you have to remember to sell when the event happens.

The bigger questions come down the road- if they get the permits to drill, where are they going to get the money? Based on their last quarterly filing for the end of Q3, they don’t have anything close to the resources, and they are generating very little cash flow out of the Lousianna properties.

The ideal scenario- get the permits, then get a deep pockets partner to help develop the concession. If that were to happen, I believe the stock would trade at a new all time high- perhaps $4 to $6.

As you can see from the chart, HDY has been in a nice uptrend since disclosing things were getting back in track in Guinea. The stock has demonstrated it’s propensity to rocket up the chart on good news related to Guinea. The way this is setting up, you really need to own some so you can benefit from the pending developments the company is signalling.






KAL Profit Alert

KAL opened strong once again today, gapping up nicely but probably getting close to exhausting the upside on this run. The stock traded as high as $.160, but did not eclipse the old high of $1.62- it has since fallen back and is now trading solidly in the $1.50 range.

You can see from this 11:30 AM chart that the stock doesn’t quite make it above the previous October high. A valiant effort.

Unless there is some additional blockbuster pending news, I suspect the stock is now ready to cool off temporarily. If you own from about 10 days ago at the $1.10 level or less, you might consider taking a partial profit. If you recently picked it up at or about $1.30- I would say it isn’t worth the trade to sell, but that’s just my view. If you bought it in the last few days north of $1.30 and you followed my advice, you should be ready to add to the position on a pullback.

Here’s the real question- will you accumulate this stock when it is quiet and no one wants it?, or will you wait until the stock is going crazy like it did this past week and jump on the speeding train? One thing you can be sure of- when the stock hits the right level again based on Fibonacci retracements, I will post a BLOG with a buy rec. Stand by.

In the meantime, any questions or comments are welcome.


TelePlus Moves Into Plus Territory

New idea TLPE is out to a strong start for OTC Journal subscribers. I covered the stock for the first time about 10 days ago at $.23 as the company announced very strong Q3 numbers and the first cash flow positive quarter in its history.

Yesterday, TLPE delivered more strong news for market participants. The company achieved $2 million in revenues in November, with over 5400 customers contributing to their success. This is up by 500 customers as of the end of September. We can conclude organic growth on an annualized basis is strong.

Taking into account the next strategic acquisition sheduled for later this month, it would appear the recent analyst’s report which pegs the annual run rate at about $37 million has a real basis in reality.

In the meantime, technically this stock looks great.

As you can see from the blue line, the stock spiked last summer. The subsequent sell off was met with a rebound, which is where the downtrend began.

The pattern of lower highs and lower lows continued until just recently. Just this past week the stock broke above it’s downtrend line and held, confirming that the stock is now definately in an uptrend.

Further evidence of a trend reversal surrounds the stock’s behavior since the quarterly numbers were released. On the release the stock immediately traded from $.23 to $.27, and then turned around and made a pre Q3 news low of around $.22. This would suggest there were sellers waiting for the news who wanted to offload postions.

The stock immediately changed course, and in a few days rose back above the high set on the Q3 release. This suggests sellers are now scant, and more buy side volume will take this stock higher.

With a couple of positive events a short term target of $.35 is not unrealistic. This is a numbers story, and the numbers keep getting better.

Your comments and questions are welcome.


KAL Smokin’

After about the worst two months I can remember, KAL is providing an oasis in a huge desert of poorly performing stocks.

In fact, since Monday’s edition on the patent for a colon cancer treatment, the stock has now run from $1.04 to$1.38- net return so far this week of 32.5%. Thank God we finally got one going our way.

Developments this week include the patent on a colon cancer treatment- not previously built into the business model, peer recognition on the company’s developing therapy Antiprimod for the treatment of the incurable Multiple Myeloma, and peer recognition for its bio-defense technologies.

It took 1.5 million shares of volume to clean out the excess supply over Monday and Tuesday, and the stock now seems to be moving up the chart with little resistance.

This chart is quite compelling. I have included a kind of reverse fibonacci retracement. Over the last few days, the stock has now retraced 61.8% of its Oct-Nov decline, suggesting it is ready to take a breather.

However, the stock now has momentum in a good market, and could continue higher. If you are wondering what to do if you don’t own it and want to be on board, here’s a thought- Decide how much of your capital you want to allocate for the stock, and invest 25% right now. Then hope for a pullback. $1.24 would be the next level to look for the second 25%. If the stock continues higher, at least you have a position. Sooner or later it will quiet down, and you will be able to pick it up when it is quiet and no one wants it. It’s just question of price.

If you picked the stock up below $1.10 this week, and were in it just for a short term trade, this might be a good oppportunity to lock in some profts. You could sell part or all.

Loyal readers would be well served to not write off the OTC Journal. We are due for a whole bunch of wins like this.

Comments and questions are welcome. It would be nice to get some positive feedback after the well earned drubbing I have taken over the past two months.