Good Monday to you! We're again seeing the major indexes pulling back on the hourly bar charts after making new highs Friday. The constant theme for a while now has been to buy the dips and sell the rips so we don't buy into this early morning Monday selloff just yet. As far as we're concerned, there's another good possibility here that it will again prove to be a good short-term entry to scalp some quick profits. For investors, it's still a cooperative environment to position for the long haul.
Although the second hour of trading today has had much more conviction to the downside than most of late, we believe that there is likely going to be a fair amount of volatility before we can justify a trend reversal. We've seen this all too often over the last few months and every single time it has only been the foundation to take the markets higher.
If and when this market looks like it's going to change its behavior, we're definitely going to let you know but we need confirmation signals to jump on the bear wagon.. For now, let's not read too much into it. We've had a few other breakouts in some of our open trading ideas and some significant news that seems to be affecting a few of them so let's dig in...
CALL Breaks Out... Running in No Man's Land
As we suspected, shares of CALL pulled back after it breached its all-time high back in the middle of February which provided another excellent entry for traders and investors of the hot VOIP play. The Company continues to buck the naysayers with their magicJack technology and business model to find another convincing leg up last week which sent the stock into new all-time high territory.
Not a stock I would want to bet against right now if I was a short seller. The Company announced a few weeks ago that they predict beating average analyst estimates for first quarter 2012 and announced preliminary fourth quarter 2011 estimates. Audited financial results are expected to be filed with the Securities and Exchange Commission (SEC) during the week of March 12th, as part of the Company's first annual filing as a domestic filer.
We're roughly $5 bucks away at this point from CALL proving us with a 100% returns in a few short months. When stocks like this run into new all-time high territory, there's no guessing where it may want to go. We suggest using a trailing stop strategy and letting it run. This will protect your current profits and allow for the stock to potentially yield even higher returns in the near-term. Things could get real interesting from here on out. Congrats to all of you who acted on the idea.
Find out what others at SCN are saying about CALL: http://www.smallcapnetwork.com/VocalTec-Communications-Ltd/s/quote/p/s/CALL/.
Rite Aid... the Right Idea at the Right Time
RAD has been one of those ideas that has been quietly killing it for SCN Members. Friday, the stock took out another new 52 week high rallying to almost a $1.70 due to Walgreen's failure to get a new contract done to fill prescriptions for patients in the Express Scripts network. It appears RAD has been one of the beneficiaries of Walgreen's failure to get a deal done. Bad for Walgreen's good for Rite Aid investors.
Taking a look at their weekly chart though, I think shares of RAD still have a little bit of room to run but maybe it's best to take profits here. The $1.77 level would be a 5/8 retracement (blue line) of its long-term downtrend that started back in September of '09. From there, I'd look for a pullback since the stock has been on a tear for a good three months now.
Nothing goes up in a straight line so be prudent. RAD has done well for us so let's not get too greedy. We can always re-enter the stock after we see how it reacts to a pullback.
If you want to know what SCN Contributors and Members are saying about Rite Aid, have a read: http://www.smallcapnetwork.com/Rite-Aid-Corp/s/quote/p/s/RAD/.
OREO Continues its Tear
Shares of OREO continue to make new highs and reward SCN Members off our entry last Monday. The strength of the volume and the move have been extremely impressive. The Company announced today the appointment of energy industry veteran Vincent Ramirez to the Company's management team in the position of VP Operations. Mr. Ramirez has successfully built an oil and gas career spanning roles in exploration, production, finance, management, research, and lecturing while working with major industry players such as Shell and Amoco along the way.
Additionally, oil prices have risen roughly eleven percent this year as global demand is high and supplies have been disrupted in south Sudan, Syria and elsewhere. The strong upswing in oil prices is lifting oil industry stocks. While big oil stocks are only up marginally in 2012, shares of many small and mid-sized oil companies are beating the 9 percent return for the S&P 500. The Paragon Report examines investing opportunities in the Oil & Gas Sector and provided some equity research on OREO. To access the full company report, go here: http://www.paragonreport.com/OREO.
PositiveID Reveals Additional Benefit to New Life Saving Technology
We launched coverage of PositiveID (PSID) back in early February anticipating that this small biotech has the goods to make a run for higher levels and it appears this morning's news has investors paying attention. One of PSID's two primary divisions, HealthID, has been developing an exciting and promising new proprietary technology, GlucoChip™, which takes the capabilities of RFID implantable microchips and combines it with an embedded bio-sensor system which measures glucose levels in the body in real time.
With over 25M children and adults diagnosed with diabetes around the country, PSID's GlucoChip™ would give diabetics an extremely unique opportunity to have their glucose levels accurately measured once the microchip and bio-sensor system were in place.
The Company came out and announced this morning that they have finalized their first-in-class development of their fully synthetic glucose sensing system to measure glucose levels within the body for people with diabetes. The Company and its partner, RECEPTORS LLC, believes they are the first to develop a fully synthetic, stable, sensitive, selective sensing system that is responsive to glucose in human plasma, which is considered to be a critical step in the development of an artificial pancreas.
PSID's CEO, William J. Caragol, stated, "The development of a fully implantable glucose sensor is one of the essential requirements for the successful development of an artificial pancreas. We believe that with the combined expertise of Receptors and our strong intellectual property portfolio that surrounds the development of our GlucoChip project, we are well positioned to play a potentially significant role in making an artificial pancreas a reality for people with type 1 diabetes."
If the Company can get their GlucoChip™ technology to market and widely adopted, the fundamental revenue implications would be huge since it is estimated that the total cost of diagnosed diabetes in the U.S. is estimated at $200 billion, which isn't even as important as the life-saving value their technology could bring to diabetics in need of a new pancreas.
The stock took out a new low last week trading down to the $.10 cent level before finding a base. It doesn't surprise us to see shares of PSID bounce pretty hard off that low. We see this all the time. Stock takes out a new low and rallies. What we need to see now is follow through. A move above $.15 cents would likely provide the necessary momentum to reverse its recent downtrend over the last thirty days or so.
When it comes to penny stocks, momentum and confidence are well over half the battle. Today's 30% pop off the low is an excellent start and may be a sign of better things to come for the stock.
Read the Company's press release in its entirety. Read what other SCN Contributors and Members are saying about PSID here: http://www.smallcapnetwork.com/PositiveID-Corporation/s/quote/p/s/PSID/ and to learn more about PSID's GlucoChip™, go here: http://www.positiveidcorp.com/products_glucochip.html, it's well worth the time to research what they're doing.
Have a great afternoon...