MicroStockProfit

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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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.

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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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.

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

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.

Time might be right to take a look at NVAX again.  The stock was a 30 cent penny stock in March of this year and hit a high of $7.79 on September 1st.  Right now it is trading at almost half that number ($3.96).  THE QUESTION IS, “DOES IT HAVE ANY MORE LEGS”.  I don’t believe that it will have a 2,500% gain like it did from 30 cents to almost $8, but I think it might have a nice gain or two in it.

Several factors could make NVAX a winner again, as follows:

News - What caused NVAX to jump in the first place?  News about Swine Flu and NVAX was lumped in with all of the swine flu stocks and took off! Now that we are approaching flu season….what is to say that we won’t get a fresh set of news about the epidemic that could set NVAX off again.

The Chart - People have been so busy selling shares that they haven’t realized that they might have set NVAX for a bounce.  Be careful, here, though – the unhappy people that bought into NVAX in its rise will be selling shares into any spike in price.  That may shorten or reduce the length and severity of any spike.

Let’s look at the chart:

Volume is still strong (daily average of over 8MM shares traded).  the MACD is still bearish, but the angle of the bearishness is slackening.  The stochastics indicate that the stock is in an oversold position.  The Accum/Dist is still showing distribution.

I suggest watching the key indicators to see if NVAX declares its intentions.  It may go down for a day or two more, but watch for the bounce.  Definitely put this one on your trading radar.

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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.