As I mentioned a while ago, SmallCap Digest has penned a free report on 5 household names that we feel should be owned now and for the long-term. All you have to do is register with your email address, which of course we will never compromise. Promise.

It’s a great look at five beaten up stocks that may have confounded you over the last couple of years. Us too. Until now.

Here’s the link. Sign up now. And tell your friends to sign up.

If you have a favorite message board, feel free to post the link there too. We think this report will have very broad appeal. No risk and free. Cool.

Trade Safely.

Mea Culpa…
In an oversight, we mixed our languages in the title of today’s SmallCap Digest piece. The correction is Housing and Energy: Living La Vida Loca?

Vita slipped in and that of course is Italian. As in Dolce Vita. I think.

It happens.

Gracias…

In our last notes both here and on the SmallCap Digest, we’ve suggested that investors use tight stops when purchasing Eden Energy. Hopefully that advice was heeded in whole or in part.

That said, EDNE has been a great trader and has provided multiple opportunities to make a decent turn within the massive moves the stock has posted since we began coverage in late April.

Since there has been little news since August, one has to assume that the drilling program has been pushed out a bit past fall. Seismic continues and we have no reason to conclude that those results won’t be released in the not to distant future. Drilling can occur year round in the area, according to the company, so we watch and wait.

As well, the shares will see some supply next month coming from the release of restricted stock from a financing last year, so the shares will likely be volatile through November. The current weakness could well be some of that stock trickling out early. If you don’t own any Eden or are considering purchase, it may be reasonable to wait and see how those events shake out, or at least continue to employ tight stops. Here’s the chart:

We have always cautioned the Eden is the personification of volatility and not for the faint of heart. Daily volumes remain robust which denotes continued investor interest. The current tech picture tells us that should the support in the $2.80-$2.90 area fail, the shares could pull back to the support areas as noted by the red lines in the chart.

As with any exploration play, no matter the commodity, news is carefully guarded for competitive reasons and in the case of Eden, any hint of success from it or others in the area could send the shares higher.

With the dearth of news and some supply potentially coming to market, there will likely be an opportunity to acquire shares through the next few weeks at great prices–unless some news leaks out to drive the shares.

You can see the dilemma. Not unusual for this type of play or the smallcap market in general.

That said, the company has premier exposure in the area and almost $20 million in cash.

In our opinion, the potential for Eden remains compelling for those investors comfortable with this type of exploration play and the inherent risks. Strategic trading will be the program over the next while and as soon as we have news or further opinion, we’ll impart it to y’all.

Trade Safely.

Fits and starts on the blog these days. Just want to get October over with. Ugly month for just about everything, except of course…grrrr, Google.

In yesterday’s SmallCap Digest piece, we espoused some wide ranging thoughts about the NASDAQ, natural gas and my personal albatross, Google. Give it a read. And sign up for the newsletter if you haven’t already.

Two stocks on the blog today.

Universal Detection continues to look like a decent spec to us. The price has been grinding around 18-20 cents and we have good expectations that it will break out of that range soon. Here’s the chart:

The shares recently pulled back to 16 cents which we see as healthy after a decent up move. We would like to see it consolidate at 17 or above, which appears to be happening. I expect a lot more news on this one in the weeks and months to come. If you want background, check out out Trading Alert. Patience with this one. Management and the product mix look compelling for a decent run in the near future.

Novelos has shown a bit more weakness than we anticipated, but the recent news of a December 2 meeting with the FDA to establish a protocol for a Phase 3 study for NOV-002 as a treatment for non small cell lung cancer puts the company ahead of its already ambitious clinical development timetable. If all goes well, a Special Protocol Assessment (SPA) plan could well get the green light by the end of December–significantly ahead of the original plan.

If so, the SPA could be in place by the end of Q1 2006 with a Phase 3 start in Q3 2006. No guarantees, but the company is definitely focused and executing its plan.
Here’s the chart:

The shares continue to be range bound in a fairly wide band from $2-$4.50. The good runup has been retraced to current levels. We would like to see a break above $3.48 to maintain the range and hence, for those who don’t have the constitution or the patience, a stop loss at $2 would likely be smart.

This is biotech, folks. takes time, money and yes, patience. Don’t forget that NOV-002 is already approved and being used successfully in Russia. Hopefully that data will help move the FDA approval process along faster.

I’m also waiting for more news on NOV-205 and Hepatitis and other applications such as NOV-002 as a treatment for acute radiation sickness and psoriasis.

Lots of meat here. And volumes down here mean that investors can pick up stock cheaply after the run to $4 and change.

Trade Safely Leave comments. Back soon.

We postulated yesterday in our SmallCap piece that the NAS has a bit more work to do prior to a decent tradeable rally. here’s the chart and a shameless cut and paste:

“Since the NASDAQ COMP peaked at the beginning of August, there have been two further failed rally attempts, each halting at lower respective highs. We believe the next stop is the 2000-2016 level, should the market take out the June support at 2050. Once it hits there, there will likely be increased fear and a lot of towel throwing as investors turf out stocks. We could then see a decent year-end rally should the market move to the 2000 level, which isn’t far from here, especially if the decline holds at that level. This period of the year seems to be acting in a pretty consistent fashion and the result will likely be a decent improvement once the weak hands are shaken out”.

As I said, shameless.

Everything seems to be drifting with little conviction which is actually a win given the time of year. Late year rally looks good as natural gas bills begin to roil the market. As we’ve noted before, ugly happenings increase the fear in the market which is ultimately good for stocks.

Speaking of stocks, we’ve done some rearranging of our SmallCap coverage to make way for a slate of new names of which Novelos (also commented on in yesterday’s piece) and Universal Detection are just the start. We already mentioned dropping Superclick and yesterday we announced that we were leaving Biophan and MIV Therapeutics, two companies with continuing amazing prospects, to their own devices. We booked excellent returns for readers for those two and as we like to find undiscovered gems, our work there is done. I suspect that there is lots of upside in the future for those two, just becomes a matter of time. And readers seem more interested in new, low priced names than continuing coverage after they’ve moved significantly.

Works for us.

The new names have begun and Friday we will bring a cool new name in the biometrics field. Some feel that these stocks are done, but I can assure you, with recent attacks, security will be on radar screens for a very long time. hence a stock like Universal Detection and others, such as Friday’s neat idea, to come.

We are also looking at straight biotechs and others in different sectors. I think you’ll be impressed. We pass on way more stocks than we cover and in the majority, they work out well.

Also, we’re working on a special detailed report that suggest 5 beaten down big cap names that the market seems to have forgotten. Our technical and fundamental work makes it apparent that these stocks should definitely be owned. We feel that they are already under heavy ’smart money’ accumulation while a large number of investors are still playing with the likes of Google, Apple and even Martha Stewart.

Sign up–and have all your friends sign up too– for the SmallCap Digest–here– to make sure you get access to your copy.

Even though smallcaps are our focus, we like to talk about the big guys too. The readership likes it and it simply makes the SmallCap Digest even more de rigueur.

Keep an eye out for it. Should be ready in a week or so.

Until next time, Trade safely and leave thoughts or comments.

Almost exactly two years ago I did a piece on the folly of fuel cell technology. At the time Ballard, arguably the poster child for the sector was in the low teens.

Well, I got beaten up pretty badly by all the hydro huggers out there. Here’s the chart for Ballard–which is still losing money hand over fist– from then till now. hang on for a nasty ride:

As you can see, it ain’t getting any better. The problem as I said then is the process for extracting hydrogen. Until someone finds a way to easily extract hydrogen from water, the current processes will likely trump any environmental benefit from using the fuel. Avoid the sector. You won’t live long enough to see a return. Ballard and Fuel Cell Energy make up almost 50 percent of the total revenue in the sector. Virtually all the others aren’t making anything.

On the other hand, hybrids are rocking as I also mentioned way back when. I didn’t suggest that you buy Toyota, but I should have. Here’s that chart:

Hybrids are dancing off the lots and waiting lists are heavy. Look to this technology to right the energy imbalance. I believe I heard that eventually, Toyota will only have hybrid vehicles. GM and Ford are stuck with big trucks and SUV’s courtesy of typically stupid long range planning. I really wonder whether there will actually be three US car co’s in five years? Bet there won’t. Or the Japanese will buy them.

Anyway, regards to all those who are prepared to wait 20-50 years for a fuel cell technology that will likely never bite.

Today’s lesson? If something sounds too good to be true….

Trade Safely.

I’m back from Scotland where I paid the equivalent of $6.50 a gallon for gas–ouch. Will have some more good stuff for y’all later, but first this announcement from today’s Smallcap Digest article:

We are formally dropping coverage of SuperClick (OTC BB: SPCK).

While the fundamentals of the company remain sound there is a potential black cloud on the horizon for shareholders. This past summer’s financing could result in substantial potential dilution to shareholders due its the nature. Shares will be issued to the financier at a 30% discount to the prevailing market no matter how low the shares trade. This situation is known as a “death spiral”.

In our view, the nature of this financing provides little upside for shareholder over the next few months until the market has absorbed these potential excess supplies.

While the situation may right itself over time and we could well resume coverage, these recent events compel us to drop Superclick at this time.

Investors may either hold their SPCK shares or sell a position to move to a faster horse. There are several in our stable that may fit the bill, depending on your risk tolerance.

Trade Safely. Back soon.