This morning prior to the open, our latest feature profile, On the Go Technologies Group (OTCBB: OGHC), was in the news again. The Company reported receipt of an order from Canada’s largest wealth management firm. This was the second order from this client in the past few weeks. The two orders total more than $600,000. Click here to read the release in its entirety.

This is exactly the momentum we like to see coming from a revenue and earnings driven play like On the Go. The Company appears to be adding some heavy weight customers to its rapidly expanding list of clientele, which in our opinion, bodes well for future revenue and earnings growth. Getting in the door of fortune 1000 companies is the tough part. Staying there is simply a function of under promising and over delivering.

Although it’s tough to put a specific number on it, the two most recent announcements from On the Go suggests the Company is on track to meet its 30 Million-revenue projection for the current year’s end. The addition of a fortune 100 insurance company and Canada’s largest wealth management group is what we believe fuels the growth for an IT based Company like On the Go.

Like we mentioned in our initial profile on the Company, we see On the Go shares trading at a price to sales ratio of at least 1 to 4. If the Company can hit its revenue and earnings target for the year, we have the share price pegged at $.73 cents compared to its current price of $.20 cents, a potential 265% increase.

So far, we like what we’re seeing, and I’m sure On the Go investors would agree. As for the trading picture….

OGHC shares, shown in this daily chart below, have experienced tremendous volume over the last few months and appear to be turning the corner and finding better upside momentum of late. For the first time since October of ’05, shares of OGHC are flirting with positive MACD territory. A good sign for sure. However, there does appear to be some short-term resistance at the $.22 cent level. If the stock can maintain the upward momentum, as shown by its ability to continue trading above the 3×3 DMA recently, trade into positive MACD territory, we believe the best is yet to come with OGHC price action in the stock. A solid break above $.22 cents may prove a critical turning point in the stock. One that traders and investors will likely cheer.

With Spring-cleaning in full swing, we’re in the process of updating our Current Profile list here at SCN. No sense in hanging on to losers, when there are thousands of other small companies out there to consider. An easy task at first glance, but as many of you know, it’s not just a matter of keeping a price % gainer and cutting a loser. Don’t get me wrong, as soon as it becomes clear a Company is a loser, we need to run for the hills, but just because a stock is lower than where we bought it does not necessarily mean we should cut it from the portfolio just yet and label it a loser. Yes, stop losses help manage this process, however, that’s another blog for another day.

Small companies take time to mature both within their industry and in the public market. Stock prices in the interim are based on many variable conditions, some more scarring and longer term, others more temporary and short-term, therefore, share prices are often erratic at best. There are many things to consider when deciding to add, maintain or eliminate a micro or small cap from one’s portfolio list.

In an effort to alienate the excess noise and focus in on the core issues at hand, we evaluate companies from two perspectives. We analyze the stock separate from the company and we review the company from a corporate performance perspective. This helps truly identify where an opportunity or problem may exist.

One Company currently in question is Execute Sports. We started covering shares of Execute (OTCBB: EXCS) back in March of this year. Among other reasons, it was an idea we felt warranted exposure, as the action sports space has been hot of late. Product sales in the space are up, it’s a new frontier in sporting goods, and it’s the choice of our teen population these days, an extremely powerful group of consumers in today’s fickle sector of new age recreation and hobbies.

From a stock perspective, the Company has experienced good exposure; trading volumes have been fairly reasonable, so it appears there exists a fair and orderly market. Although the stock is off its highs, the current stock price appears reasonably in line. In looking at a daily chart, the stock has drifted south for a couple of months now, and appears to have found a base of late. Unfortunately, the base has drifted below our suggested stop loss level of $.35 cents, which we mentioned in our initial profile on the Company. A recent financing will raise a concern or two regarding supply of stock for sale, but financings and dilution are a part of the public market, like it or not, it is going to happen. After reading the terms of the financing, one would likely agree there exists better and worse terms than what Execute settled for, but the reality of small public companies is they often have to settle for the best of the worst. Bottom line, we don’t see any major problems with the stock side of Execute if the Company can execute at the corporate level, and that’s where we see a potential problem.

After reviewing the Company’s recent 10Q filing, I can see why there’s a bit of management shuffling going on, and that’s putting it nicely. I don’t mind seeing an operating loss increase, but let’s see the revenue increase along with it. Now there can be reasonable explanations, but then no public statements issued regarding their performance or providing any valid reasoning for the disappointing numbers? The Company recently announced its Academy Snowboards’ international sales are up 98% year to date. How much year-to-date? What were the numbers? Anyhow, as you can see, we’re concerned about the corporate performance, not so much the stock side. Raising money is not a problem, doing something positive with it and growing the company in the right direction seems to be.

Time will tell. We’ve seen it all before. It would be no surprise to see this Company turn around on a dime, but unless we start getting some positive developments, and soon, it may have to turn around without us.

In the coming weeks ahead, don’t be surprised to see us drop and/or add a few to our Current SCN Profile list.

Happy Trading and Peaceful Investing

For those religious biotech followers, one of their biggest weeks of the year is just around the corner. And, if you don’t think there’s going to be a few biotech stocks that are going to make huge moves in the coming weeks after, think again. Look what happened to Amgen’s stock, (NASDAQ: AMGN), last year in the few months following the big pow-wow. ASCO takes center stage in Atlanta this year June 2nd – June 6th.

Consider it the modern day Woodstock for cancer drugs, except everyone has grown up, dresses nicer and speaks much more eloquently. Maybe that’s a bit of a stretch, but nevertheless, it’s the most important event of the year for companies looking to gain recognition and tout their most recent advancements in the forever-coveted arena of cancer research and development.

ASCO is a non-profit organization, founded in 1964, with overarching goals of improving cancer care and prevention and ensuring that all patients with cancer receive care of the highest quality. More than 23,000 oncology health care practitioners belong to ASCO, representing all oncology disciplines (medical, radiologic, and surgical oncology) and subspecialties.

The ASCO Annual Meeting is considered the premier educational and scientific event in the oncology community. The Meeting attracts more than 29,000 attendees from all over the world, from street analysts to the most renowned cancer research and development scientists on the planet; ASCO is a who’s who gathering of biotech big wigs.

If you’re interested in learning more about the industry, the ASCO web site is loaded with valuable and insightful information.

What is this going to do for certain biotech stocks in the few months following ASCO? I think we’re in for a short-term biotech rally. I say short, because we’re talking about a trade here, not an investment. Whatever comes of ASCO, you’ll likely have time to invest in the weeks after, if that’s what you choose to do.

For now, let’s have a quick look at the BTK, which is the Amex Biotech Index, and the IBB, which is the NASDAQ ETF for Biotech stocks. In this weekly chart of the BTK, you can see the index has sold off of late in sympathy with the broader markets, we’ve circled its 3/8-retracement, where it currently is hovering, but point to the 5/8, which would be an even more ideal entry point, obviously. All of our favorite technical indicators are pointing to an oversold market for biotech right now, so I suspect we’ll see a tradable rally leading into ASCO, and good follow through in the right stocks following the meeting.

Inevitably, it would be no surprise to see the BTK clean up the 5/8 retracement level sometime this summer. If you agree with our thinking, some exposure to sector wide puts may be in order at the top of the short-term rally anticipate.

Of the two, the IBB appears riper for a rally (you can’t directly trade the BTK anyway). Keep in mind, the BTK and the IBB are made up of different stocks, so different price action makes clear sense. The IBB, as shown in this weekly chart, currently sits on a nice 5/8-retracement level (circled). We point out the volume of late in the chart, which has been fairly substantial, so we like that. A clean up of the $70 level would be no surprise at all, and would represent an excellent entry for a trade to the long side.

Whatever you decide, pay attention to ASCO. It will tell many of us where the industry is going over the next couple of years, and likely who will be leading it there.

Friday Xtreme confirmed its receipt of the ugly award. Although we have managed to bring to the readership a number of winners to date this year such as CCBEF, CVM and NWWV, just to name a few, XTME is not one of them. Did some make money trading this stock as a result of our profiling it? Sure, you could have picked your spots from time-to-time and made some excellent profits, but for the general investing public, we’re not convinced that Xtreme is worth holding any longer. Disappointing to say the least, but we can’t expect every stock we profile to be a homerun and Xtreme is far from that.

We mentioned prior that $.085 was our stopping point. Shown in this daily chart of XTME, you can see Friday it blew right through that level.

Needless to say, we’re at that point where XTME is pretty much done in our book. There are two positives I should point out though. The stock has recently shuffled the management, which can’t be bad considering what the stock has done under the old management and the selloff Friday was on what I would consider to be less than capitualting volume. We’ll give it till the end of the month before deciding if we’re throwing in the towel on Xtreme for good.

In our Friday edition, we mentioned a solar play, Evergreen Solar, we thought was starting to look appealing. We noted $11 as being the price to watch for in ESLR. The stock closed Friday at $11.52. In a blink of an eye this morning, the stock has sold off on pretty good volume and currently sits at $10.15 as I type. This is starting to look even more appealing as this monthly chart shows the stock trading in a confluence area right now with $9.60 being a 5/8 retracement level from an important fib node set back in early ‘05.

Since stocks often like to take out round number stop levels, anything around or just under the $10 level looks like a good opportunity to consider a quick trade to the long side. Keep in mind, you must consider this a fairly risky trade, I call it a bonzai trade where we try and peg the bottom in a stock with downward momentum. A stop of $9, and a target of $12.

Let me share a couple of important trading tips here that I thought of regarding the ESLR idea. First, I strongly recommend never using GTC limits. Case in point, today with ESLR. We mentioned a $11 as an interesting price point. If you’d have put in a GTC buy limit of $11, you’d have been filled already and would not have the opportunity to consider this trade at a now lower level. Second, be nimble. Just because something looks good today, does not mean it will necessarily look good tomorrow. Case in point once again, the volume associated with ESLR selling today suggests that it may have a bit more to go before we see a tradable rally. Without seeing today’s volume, one would not be able to identify this. Therefore, I can’t emphasize enough the importance of being nimble!

We stand corrected in last night’s edition due to an amazingly knowledgable reader of ours on the topic of good ‘ole classic american television. Rather than try and explain our error, I’ll simply provide his email in its entirety…

“I thank you for the update on BioCurex, as I am an investor.

But I question your choice of the photo that you attached to the article in question. You must know that the photo is of Lou Costello, not Bud Abbott. I assume you intended to make the connection between Abbott Labs and the “straight” man (Abbott) of the comedy duo, Abbott and Costello.

As an aside, Bud Abbott was an *ss, crook, and arguably the worst partner Lou Costello could have had. Costello made the tragic error of trusting Abbott to broker contracts, which he (Abbott) did, while lining his pockets at Costello’s expense. With partners like that, who needs enemies…or competition.

In any event, Abbott and Costello remain one of comedies best duos in the history of entertainment, along with Laurel and Hardy, Lucy Ball and Dezi Arnez, Gracie Allen and George Burns, and, of recent vintage, President Bush and VP Dick “Yer-in-my-line-’o-fire” Cheney.”

An informative and entertaining email to say the least, and of course it is only one man’s opinion on the practices of the dynamic duo, Abbott and Costello. But based on our reader’s thoughts, maybe it was better that we put the spotlight on Costello, since he obviously appeared to be the better of the two.

Nevertheless, we stand corrected and appreciate the quality feedback we receive every day. Regardless of the topic.

Got to love volatility. Lots of talk running amuck in the market these days about the bull market being over, and the start of a new bear market. Oil prices skyrocketing, gold going through the roof and a couple more interest rate hikes anticipated from the Fed. But remember, Wall Street loves to climb a wall of worry. Also remember, what’s taking place in the market right now is in preparation for what will likely take place in the economy many months from now.

I’m not going to sit here and speculate on whether or not this market is rolling over just yet. I can tell you that tremendous volatility often precedes a change in market direction, which also opens the door for great trading opportunities if you’re willing to be nimble.

Therefore, I am actually going to speculate that there exists a nice tradable rally in the IWO right now, which is the Russell 2000 Growth ETF. Want to know specifically what companies make up the ETF? Go to Russell.com and find out, because personally, I don’t care. It changes from time-to-time. What I do care about is small caps have continued to outperform large caps, and until proven otherwise, that’s the way I’ll see it.

Let me build my case for this trade. The NASDAQ Composite, as shown in the chart provided, hit a perfect 3/8-retracement level today testing its three monthly lows established from Jan. through March of this year (circled). It would be no surprise to see the Composite clean out those lows or find support there and stage a furious snap-back rally sometime early next week.

The DJI (chart not shown) has simply broken below the 3×3 for the first time in a while on a daily chart, and that by no means suggests a bear market to me, at least not yet. More often than not, when an index or stock breaks below the 3×3 DMA, it usually breaks back above it within three or four trading periods. The S & P looks much like the DJI as well.

So, with the broader markets poised to snap back, I’ll focus in on the strength of the markets of late (outside of oil and gold, which I won’t touch right now), and that’s small caps. What better way to play the broader small cap market than the IWO?

In the chart provided below, the IWO has pulled back hard in sympathy with the broader markets. Notice the retracement levels I’ve drawn from major previous support and resistance levels? Notice you can barely read the retracement numbers around the $77 dollar area of the chart? That’s intentional. It’s a confluence area in the daily chart consisting of a 3/8 and 5/8 retracement levels. Perfect. That’s what the sell off appears to have been gunning for, and today it hit it. Hence rally time.

I’ll make the stop $74 and the profit objective $86.00, right up against it’s all-time high when it first began trading back in 2001. You can play the calls or the stock, up to you. Regardless, be prepared to be nimble. From there, we’ll see what happens.

Good trading.

We got the following email from a reader posing a good question….

“Is XTME still a stock to keep or not?”

Like I said, good question. Obviously, it all comes down to your entry point. What’s your cost basis etc… If you bought XTME at $.08 cents in early February, it’s a much different story than if you bought it back in February of ‘04 at $.80 cents. Ponder that with the fact that every investor has a different risk tolerance level and you can see why it’s a difficult question to answer. However, here’s some thoughts that will likely help you with XTME and even other trades and/or investments you make going forward…

Before I do get into XTME, let me say, when you invest in nano, micro or small caps, it’s inherently risky, but the upside can be huge. Just look at CVM, NWWV, CCBEF and SEHO just to name a few of our winners of late. Phenomenal results for sure, but then there’s the likes of XTME or NVLT right now. So, we’re going to have winners. We’re going to have losers. The whole idea is to manage the portfolio properly so that we end up the year with big gains when it’s all said and done.

Now, on to Xtreme. If you’re trading the stock on a short-term basis, you have to like the wash and rinse move today. The stock traded down on minimal volume, likely cleaning up any stops left at $.10 cents, then came right back to close up a hair at the close. The last time XTME pulled that move, the stock went up about 60% within a month. I’ve circled it for your convenience. Should it make a decent move here soon, I think $.13-$.14 cents is real doable in short order, 30% upside would not be a bad thing. I do suggest to those who like to trade XTME, use stops! The historical picture hasn’t been as rosy, but if you pick your spots, XTME can be quite profitable and fun.

If you’ve been an investor in Xtreme for quite a while, you have tremendous patience (which is obviously one of the biggest keys to generating good returns in the market). But once again, I’m a huge believer in stops, if you bought it at $.80 cents, what are you doing in the stock at $.10 cents?? Depending on your risk tolerance level, your stops should sit anywhere from 5% to 25% in most cases. Sometimes up to 50% on small speculative positions. I’m not big on stops any larger than that though. Way too much to stomach, in my opinion.

Fundamentally, the stock is priced decently at current levels since it is trading around 1 and a half X’s sales. Although the company is still not profitable, these things take time. If they can make a turn for profitability, well… you saw Newave. They could end up being bought. There appears to be allot of M&A activity in the boat industry lately. The prospects aren’t bad right now, but patience is wearing thin. That’s why I suggest a stop at $.085 cents

Good trading and peaceful investing.

This just in …. The Beverage Network (BevNET.com) has just completed an excellent review of the revamped Clearly Canadian Products.

That’s not all ….

CCBEF closed up for the fifth day in a row, ending the day up $0.03 at $2.77. Keep a close eye on this one. As stated in this morning’s edition of SmallCap Digest, this run has been a long time in the making ….

NeWave closed up 50% today! From where I am sitting, it looks like NeWave has truly turned the corner. Up 50% to $0.405 on volume of almost 3 million shares, well above the average 30 day trading volume of 174,400. After gapping up over $0.07 from yesterday’s close (see chart) , it never looked back, eventually hitting a high of $0.47 before profit taking brought it back to close at $0.405.

Keep a close eye on this one. Any signs of weakness or consolidation could provide another buying oppurtunity for continued gains.

Clearly Canadian has been quite perky of late. Volumes are swelling and the shares are marching ahead based on renewed interest and a series of corporate developments.

The shares traded to an important .618 retracement level of its impressive year-to-date runup. The volatile nature of the price action once it hit the .618 appears to have set the catalyst for a new leg up. Currently trading around its 52 week high of around $2.70, it would not surprise to see the stock break out and run to an initial expansion level of $3.31 before running into any short-term resistance. No guarantees, but given the significant name recognition as well as other factors we have duly noted in past articles and the volume growth of late, the shares appear poised for more momentum. And that’s a good thing… Trade Safely.

Someone rolled in this am and pounded the shares of CEL-SCI. The shares opened at $1.25 and supply roiled the shares down to $1.06. Seems to be recovering somewhat and we’ll look at the chart and comment presently, here. As we’ve said, these babies can move fast. Don’t know of anything contensious and the action appears a trading blip rather than anything untoward. Stay tuned.

Trade Safely.

Update:

Shown in this daily chart of CVM:, the stock has pulled back to a perfect .618 of its impressive move up in early April.

When any stock decides to correct to the .382 and/or the .618 level it’s important to keep in mind that these are usually two important levels of retracement. It’s almost impossible to determine with absolute certainty which one a stock will hit before resuming an upleg, if at all. The .382 level often proves more rewarding, as many stocks may never trade to the .618 before resuming their run. However, the .618 obviously provides a lower price entry level. It’s a matter of risk/reward to the individual. In that regard, everyone is different.

In the case of CVM, this .618 pullback looks extremely attractive if and when the stock decides to pick up momentum again.