MicroStockProfit » penny stock analysis

When will Generex Biotechnology (GNBT) stop falling?

Editor — Wed, 14 Apr 2010 13:32:25 +0000

GNBT has been around forever in the pennystock world. It has been touted as the next Nasdaq stock (or a piece of crap that is going to zero) in the time that I have been watching it.

It definitely isn’t going to zero, but right now traders and investors are down on GNBT…..for good reason.

Generex Biotechnology Corporation (GNBT) is a biotechnology company that is working on variations of its drug delivery systems for diabetes (and other illnesses). Here is a link to their site if you want to do more DD.

GNBT has been trading in a range between $0.40 and $0.70 for the last 6 months. Right now, it is trading at the bottom of that range.

I am not recommending that anyone “catch the falling knife” on this one, but I am thinking that GNBT is prime for a reversal. For all of the negative press that GNBT has been receiving, the news that they have received a financing commitment is a positive indicator. True, the financing is at a discount to GNBT’s current trading price. But, the commitment is real and they have already drawn the first tranche. It is composed of 24 tranches. The financing guys are not stupid. They want to be able to limit their exposure if things get worse for the company.

The negative press stems from the ever-irascible Adam Feuerstein of TheStreet.com, who called out GNBT and labeled them frauds. The company responded with a $250 Million defamation suit. I like MIchael Fizhugh’s article on SeekingAlpha.com about the whole mess. Read it here.

The Chart

Clearly, GNBT is in a downtrend. But, there is hope for a recovery. In the last 5 trading days, there has been 3 high volume selling days BUT there have been two up days. All the news is not bad. It looks like buyers are trying to bid up the stock. The oversold stochastics will exert some pressure for a bounce, but with the MACD still bearish, the stock could continue to fall for a while yet.

Watch for the MACD histogram to indicate that the bearish trend intensity is lessening. Another indicator that I am using lately is On Balance Volume (OBV). That indicator is telling me that the stock is still in distribution.

I am not qualified to pass judgment of GNBT’s drug portfolio. I look at anecdotal information to give me some idea of whether this stock has a chance. The financing is a huge indicator to me that GNBT will be around a bit longer. The company has plenty of cash, low debt, great ratios….that will help them see this “crisis” through. Any good FDA news and this stock will fly….Bad and the reverse will happen.

GNBT’s volatility is a great thing for short-term traders like us.

Trade with confidence,

Jeffrey Dean, Editor

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither MicroStockProfit.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.

Chart alert for China Carbon Graphite (CHGI)

Editor — Tue, 13 Apr 2010 13:07:05 +0000

I did my screens this morning and came across a company that is on a strong downtrend. While I am not suggesting that you “catch a falling knife” on this one, I do think that China Carbon Graphite Group, Inc. (CHGI) is worth keeping on your radar.

CHGI has had all sorts of good news, yet the stock continues to go down. Part of the reason is their recent cash raise. It not only was dilutive, but also priced well below the market price. A convertible preferred issue, priced at $1.30 conversion, gave CHGI needed funds, but set the bar at a much lower price for traders and investors.

The company continues to be profitable and with the capital raise has an even stronger balance sheet. MInimal debt and a strong cash position make CHGI a good long-term bet. The short term is a different matter. Since its favorable earnings report earlier this year (and a spike in it shares from $1.40 to $3.40), the stock has drifted downwards. It could have farther to fall, but the bearish momentum appears to be easing.

I would watch CHGI for a pause in this bearish momentum. CHGI is not some “shadow” company. It has real revenues and earnings, a strong balance sheet, a presence in the largest market in the world. The chart is not its friend right now, but I don’t believe that it will continue to fall much farther.

Here is my annotated chart, so you can see for yourself.

Good luck and good trading,

Jeffrey Dean

Editor

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KOPN has no reason to be this cheap.

Editor — Mon, 05 Apr 2010 21:09:42 +0000

I like Kopin Corporation (KOPN). The name of the company isn’t exactly thrilling, but the fundamentals are. The company should have a more tech sounding name…for what they do. Techstorm is nice…NanoVision would be better, too. Anything is better than Kopin.

KOPN produces lightweight, power-efficient, ultra-small liquid crystal displays (LCDs) and heterojunction bipolar transistors (HBTs). They are a world leader in both of their main lines and are being well rewarded by the marketplace for that position. They just posted their 4th best quarterly performance in their history. They have tons of cash, no debt, awesome margins and ratios. The company appeals to my CPA side.

However, all this good news and positive vibe isn’t reflected in the stock price. I went a little overboard with my analyis. I don’t usually include so many indicators and information. I hope it is still instructive (and legible).

KOPN Chart

I like KOPN as you can tell. It is having a bit of a dry spell, but I think it will come back strong.

Jeffrey Dean

Editor

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SAY Hey! for Satyam Computer Services (SAY)

Editor — Thu, 01 Apr 2010 20:01:01 +0000

Apologies to Willie Mays for using his nickname…..

Mahindra Satyam (formerly Satyam Computer Services Ltd.) (SAY) is still picking up the pieces from its humongous accounting scandals. Law suits are flying all over the place and SAY is dealing with a great deal of uncertainty: global downturn in IT spending, repercussions from their scandal and strong competition.

From a chart standpoint, they may be ready for a bounce. It will be interesting to see if they can hold this support level. They dipped below it on an intraday basis and rallied strongly. Any good news and they could run. The stock has been trading for the last 6 months in a wide band between $4.40 and $6.50.

SAY could be a great radar stock.

Trade like you mean it!

Jeffrey Dean, Editor

P.S. I personally like them because I am a HUGE soccer fan and they are the official IT Services provider for the 2010 FIFA World Cup! Maybe if I do a really positive blog on them they will give me tickets to the Cup. I saw the 1994 World Cup final between Italy and Brazil. I’d like to see another one.

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Time to take a look at Netlist (NLST)?

Editor — Tue, 30 Mar 2010 13:10:02 +0000

Netlist, Inc. (NLST) was one of the great stock success stories of 2009. The stock limped along at around 60 cents for much of 2009, but then caught fire and zoomed to $8.00 per share in the magical month of November. With the news of the impending release of their “game-changing” memory module, they took the market by storm. The product allows the server to believe it has more main memory than it is supposed to and is expected to put them in direct competition with Cisco (CSCO) and with a competitive advantage.

Since its almost 900% gain in November, things have been pretty quiet for NLST. In fact, the overall trend of the stock has been down. The company itself is still strong. NLST is still posting losses, but the gap is narrowing. Its balance sheet shows a great deal of cash, no debt and strong liquidity ratios.

The chart is where I want to focus your attention on.

Since I am a short-term trader, I don’t expect to be around in this stock very long. Short-term, it might be setting itself up for a bounce. There are a great number of people that are trapped in it at higher prices who will be selling into any strength. That is why (absent any news) any rally will be short-lived IMO.

Have fun and trade well,

Jeffrey Dean, Editor

I am betting the luster comes back to Yamana Gold (AUY)

Editor — Wed, 10 Mar 2010 15:53:01 +0000

Yamana Gold, Inc. (AUY) is still reeling from the beating it took from the Street and the financial press for its last Quarter/last year’s performance. AUY missed every meaningful benchmark (revenues, cost per ton, production volumes, etc…) and those misses are compounded by the stagnant gold prices recently. To say that AUY “missed” those benchmarks is not to say that the company is in any trouble. It is still profitable and has a strong balance sheet, but the market is looking for AUY to continue to be a low-cost producer and for growth.

BUT (and, that is a BIG but), AUY might be a great chart play. It is showing that it could bounce off of near-term support and deliver a short-term gain to savvy traders.

Here is the chart with my annotations:

“Is the bad news burned into the stock price” is the simple question that traders should ask themselves. I think that it might be. Historically, AUY has had great elasticity and bounced off of oversold levels and returned some nice gains. If you were to do a year chart on AUY, you would see what I am talking about.

AUY could be a nice short-term trade. Any breaks below support and the stock should be avoided until it can build a new base…or it can issue some better news.

The tide may be rising for OCNF

Admin — Mon, 05 Oct 2009 13:00:12 +0000

Dryships (DRYS) has gobbled all of the headlines in the bulk shipping category….It has been both adored and reviled by traders for all of 2009. It’s volatility has made (and lost) lots of money for traders this year alone. One of the companies that is in DRYS’s niche has flown below the radar all year, but I think is worth taking a look at: OCEAN FREIGHT, INC. (OCNF).

I cannot claim to be an expert in this arena….I do not understand capacity, loads, fleet issues, etc…. I do believe that through a massive financing undertaken last year, OCNF has the financial capital to work its way through this market downturn. The company showed only a small operating loss last Q. Most of the large loss was due to non-recurring items (arbitrage gains, loss of sale of ships, etc…)

The chart is what caught my eye initially…. A trader buddy of mine had mentioned the company to me and when I checked it out I liked what I saw. Here is the chart and you might see what I am seeing.

The first thing that stands out to me is the volatility of the stock….”if it goes up, look for it to come down. If it goes down, look for it to go up”. The latest slide has been precipitous, but there are signs that it could be reversing. First, the stochastics indicate that it is oversold (a big upward pressure there). The stock has reached a key support level at $1.25 and I wouldn’t be surprised if it bounced off that level.

I say this often, but as a recovering CPA, I really like fundamentals. I mean the old-fashioned cash-in-bank, receiveables stuff. OCNF has high debt which is usually the “kiss of death” in economic downturns, but it appears that the company has the liquidity to service its debt and, perhaps, come out stronger on the other side. Their press releases paint a picture of a company whose fleet will be highly utilized into 2010…which is the key for a bulk shipping carrier.

With a management team that sounds like the traveling cast of Zorba the Greek (why are all shipping companies Greek-registered?), the company sounds like it might be around long enough to get noticed. Keep it on your radar. I don’t know how much farther it will fall, but be ready when this one turns.

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DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND ON THIS REPORT. We are not registered as a securities broker-dealer or an investment adviser either with the U.S. Securities and Exchange Commission (the “SEC”) or with any state securities regulatory authority. We are neither licensed nor qualified to provide investment advice. Neither InvestorSoup.com nor its affiliates have a beneficial interest in the mentioned company; nor have they received compensation of any kind for any of the companies listed in this communication. The information contained in our report is not an offer to buy or sell securities. We distribute opinions, comments and information free of charge exclusively to individuals who wish to receive them.