Momentum Plays based on Technicals alone

FMDAY
agys
drl
alan
CMQ - Highly speculative

Scoreboard - Close of market May 26, 06

Our model portfolio (which is just a means for us to track our opinions and is not a real portfolio) was up 0.56%. The Asian markets are crashing and the US market is still relatively strong. As per my market prediction, I think this is the beggining of the June upward spike I mentioned last week.

Our biggest winner this week, GNTA, is up a little over 20% since when we first recommended it. This would be a good time to book some gains in this holding. However, we do believe that this upward spike is a result of "Someone somewhere knows something that I don't know". So, this could mean that we may see some positive PR in the coming week, which could drive the PPS up to near our target price of 2.20.

ATAR is taking the biggest beating from our list, down 17.5%. Atari's earnings call is scheduled for June 14. This is a pure play on management. To be honest, we're not very pleased with them right now, but we'll wait to hear from them on the earnings call before making any recommendation.

INSM launched IPlex last week, but it almost turnout out to be a non-event in terms of PPS. That's not right and we believe that the PPS will reflect its true price (close to 1.80) within two weeks. As a manipulative stock, the MM's may make this a bumpy ride to shake off the weak hands, so make sure you got some muscles to stay in the game.

We maintain our positive outlooks for AMTD, NTES and GENR.

Market Prediction

Here's my prediction of the market -

Interest rates will rise again and the second half of 2006 will lead the market downwards. However, I do believe that we will see another upward spike in June, before the real downtrend occurs.

This downtrend, if short term may reverse in second half of 2007, but if long-term can continue till 2011. This will be a result of money flowing into emerging markets, weakening US economy, and rising US debts.

In my opinion, technology and financial stocks will get hit the most.

No one knows what's in the future, but this is my opinion.

GS & REDF Looking Good - Right here right now

I like the current weaknesses in GS and REDF. GS at 146.15 and REDF at 14.99 are great buying opportunities. However, I will not advise these as short term plays due to the market's momentum downwards. So, if you can live through the tough times, these plays will be very rewarding in second half of 2007.

Scoreboard - Close of market May 19, 06

With the Fed raising interest rates to 5% last week, this was a pretty tough week for stocks. Our model portfolio (which is just a means for us to track our opinions and is not a real portfolio) was down 3.14%.

Lets discuss stocks in our model portfolio one by one.

Our model position in TD Ameritrade (NasdaqNM:AMTD) is at a 5.77% loss this week. This stock had a little roller-coaster ride this week going from ~18 to ~ 16.50 and now trading at 17.31. Current levels from 16.50 - 17.30 are good levels to average down your position. The action we see here has to do with the overall market. We maintain Ameritrade as a candidate to stay in the model portfolio and average down at these levels. Our original target of $23 is intact by end of 2006.

Our model position in Insmed Inc (NasdaqNM:INSM) is at a 5.42% loss this week. The launch of IPLEX is several weeks away, as per INSM's management. The judge asked INSM and TRCA/DNA to take the issue outside and try to negotiate and settle it. Sounds much like what happened to RIM a few months ago. What this means is that if a court is to take decision, neither side would be happy. This recent development has increased the risk factor in this position. However, we feel that both INSM and TRCA will see new highs as the true potential of IGF-1 technology comes out. We maintain our original target of $2.50 for this as a long term target.

Our model position in NETEASE.COM ADS (NasdaqNM:NTES) is at no loss no gain this week. This companies profits jumped in online gaming in China, they're buying back shares, but they get a downgrade by Citigroup. The stock did see $23 and change this week on speculation near the conference call. However, investors interested in foreign investment saw this as a good play in China and the rapid price moves up and down made it a good trading stock. We maintain that this stock will see mid 20's soon.

Our model position in GENTA INC (NasdaqNM:GNTA) is at a 8.90% loss this week. Think of this stock as stealth play right now. We maintain that this stock will see 2.20 by end of this year.

Our model position in ATARI INC (NasdaqNM:ATAR) is at a 12.50% loss this week. This is a high risk play and its a play on the company's management and parent company. ATAR has failed to meet NASDAQ National Market continued listing requirement(s) and we believe that the management has the potential to get and keep this stock over $1 for 10 consecutive days before August, which will prevent it form going to pink list.

I like Jim Cramer's principle "Buy on weakness and sell on strength" as he says on his Mad Money show. I think this market is a weak market. However, I also think that we will be in this market for the second half of Q2 so I'd say hold to buying right now, but sell and book your gains.

Enjoy the weekend!

Smith Micro Software (SMSI) - Student play

You didn't hear it from me first - you heard it from Cramer at his Mad Money Play on May 16, 2006.

Stock: SMSI
Price: 11.58
Cramer Says: Buy

As per the Mad Money show, Cramer and his Stocks under $10 buddy on TheStreet.com, Will Gabriesky believes that this company will reports Earnings per share (EPS) of $0.80. The company makes the software that lets consumers download music from their Verizon cell phone. Cramer also mentioned that the company is creating a compression software that can compress pictures and video by as much as 30%, but this business is not profitable yet. As per Mr Cramer, when it does become popular, this stock trading at a multiple of approx 4 (based on eps of $0.80) could go much higher.

I love gadgets and I love Verizon as they are the best cell phone company in terms of reliability, per my standards.

I'd agree 100% on this one with Jimmy. This is a long term play and I'll say this stock goes to $20 in 2007.

Adding to watchlist.

Position: None
The writer had no position in the stocks mentioned in this article at the time of writing

Watchlist - Stocks under $5, $10, All

Starting today, we will be showing our watchlist on the right side of our website. Watchlist stocks are those that have high potential but we are waiting for something to occur before we will add them to our Model Portfolio.

The watchlist is divided in three sections:

• Stocks under $5 - stocks between 0.001 and 5.00


• Stocks under $10 - stocks between 5.01 and 10.00


• All other Stocks - stocks above 10.01

VOIP Play - Vonage VG

Your first question will be, What is VOIP.

In short, VOIP (or Voice over Internet Protocol) helps people make and receive phone calls using your broadband Internet connection instead of the standard phone line.

If you're interested in the technical details, Vonage converts your phone calls into data that zips through your high-speed Internet connection just like email. It comes out the other end just like a regular phone call. Your callers will never know that it's any different since it sounds just like a regular phone call.

Vonage, if ends up going public will trade under the symbol VG. Some researchers say that Vonage may get bought out, just like Skype was bought out by eBay last year. We will surely not trade on "getting bought out speculation" coz i don't like it.

Vonage has not gone IPO yet. However, it has made an offer to existing subscribers that they can buy the stock at $16 with the condition that they have to buy a minimum of 100 shares. I like this marketing that Vonage is doing by giving priority to the 1.4 Million subscriber lines it has. Also, it has created a lot of hype among people who don't really consider themselves as investors but feel that opportunity is a privilege.

I like Vonage because it is very popular among small call centers in India. People who work nights at big call centers run their own call centers from home using numbers and minutes from Vonage. Young adults in India are making tons of money by using this technique as demand for outsourcing call center oriented business. You may think that all call centers are already outsourced but thats not true. Only mid to large size coorporations have outsourced their call center support business. The smaller companies are still on their way to outsource call center support.

I will not recommend Vonage as a long term investment. It will be a good trade as I believe that the hype will make the price jump to low 20's in a few weeks when the stock comes out.

We'll keep an eye on this and keep you readers informed.

Stock picks - NTES, GNTA

Stock picks for the week (May 15th 2006 - May 22nd 2006)

After researching for a few hours on various sectors, i have come with my own picks for the week.

1. NTES (Nasdaq) Net Tease Inc - Chinese Internet Gaming company: http://corp.163.com
Current Price: $21.32
Expected: $25.00 (for Short term) & $60.00 (Long term)

We are recommending NTES for three businesses that are all going to grow in China over the coming years:
1. Online gaming is hot in China right now
2. Wireless services is hot globally among the youth
3. Internet portal - I consider this the Yahoo of China

2.GNTA (Nasdaq) Genta Inc - http://www.genta.com
Current Price: $1.46
Expected: $2.20(for Short term) & $8.00 (Long term)

According to the company's profile on Yahoo Finance,

Genta Incorporated engages in the identification, development, and commercialization of drugs for the treatment of cancer and related diseases in the United States.

This is a high risk, highly speculative play.

Position: LONG GNTA
The writer was a LONG GNTA at the time of writing and had no positions in the other stocks mentioned in the article above

Stock - Buy Alert - INSM @ 1.66

All of the following is in my opinion only!

Stock: INSM
Play Type: Speculation
Term: Long Term Investment
Buy Price: $1.66

Insmed Incorporated, a biopharmaceutical company, engages in the discovery and development of drug candidates for the treatment of metabolic diseases and endocrine disorders in the United States. Its lead product includes IPLEX, mecasermin rinfabate injection, which is used for the treatment of growth failure in children with primary IGF-1 deficiency.

Their lead product IPLEX is nearing a market launch. For the Quarter ending March 31, 2006, the company announced that their IPLEX market launch is on track and is several weeks away. However, this stock is completely manipulated by MM's so don't day-trade or play with this stock for short-term gains.

If you look at this company for the first time, you will immediately say "Why is a company with an FDA approved product still trading under $2." The answer is that there are several lawsuits hanging over the company. The company's biggest competitor is Tercica (TRCA), which only has one IGF-1 based product called Increlex.

What you need to understand is that IGF-1 is an old drug technology (or whatever they call it in the pharm industry), which was originally in development by Genentech (DNA). DNA didn't think there was enough money or couldn't come up with a good product using IGF-1, so they licensed it to both Tercica and another company that was bought out by Insmed. Tercica was the first to market with an IGF-1 product, but Insmed is not far behind. The great thing about INSM is that they use their own protine Somakotine and mix it with IGF-1 to form IPLEX. This combination of Insmed's proprietary protien has removed some major side-effects caused just by using IGF-1.

My prediction for the target stock price by end of 2006 is $2.50 - $3. I'm taking into consideration that the market will be going downwards from here on for the rest of 2006. If the market turns around upwards, you can expect PPS (price per share) to be around $3 - $3.50.

As mentioned earlier, this is in my opinion only.

For most up to date information regarding INSM, use this message board - InvestorsHub.com.

Position: LONG
The writer was a Long INSM investor at the time of this publication.

Fed hiked the key interest rate to 5%

Yes, it was expected and came to be true! I say we'll see a down market for the rest of this week, which may be good opportunities to buy.

Ethanol - Make Cash from Corn is all over CNBC today

If you watch CNBC, you'll see they're all over Ethanol - Make cash form Corn. Jim Cramer did an entire session on ethanol plays a few days ago. Click here for the link .

The best of breed stock Cramer recommended is up approx 6% or $2.40. I'm starting to notice that CNBC pumps are pretty effective.

Research Opportunity - Plays with rising gas prices

What would I do if gas prices hit $4 a gallon. I'll change my habits and try not to travel as much as I did 9 years ago.

It will make the middle class sit at home more often. When you sit at home, you watch tv, movies or chat on the internet. Maybe you don't do this but look at the next generation.

My plays would be Comcast, Charter Communications, Blockbuster, Netflix - research is on the way so hang on.

[Update May 16, 2006]
Based on fundamentals, Netflix is due for a correction at approx a multiple of 35. Blockbuster was a 20 dollar stock trading at 4.78 at today's close. Netflix rents dvd's via postal mail using a subscription model. Blockbuster used actual stores to rent movies and is just starting to rent movies online. Charter and comcast are both good plays too. However, I am not in a position to recommend any of these at this level.

[Update May 17, 2006]
I may have found a play that I like by the first look - research is on the way on stock ticket MOVI.

Employment Numbers, FED & Interest Rates

Lower than expected employment numbers were reported today, which makes analysts think that FED chairman may not be able to raise interest rates any further at the next FED meeting. I disagree with those analysts. I think the interest rates will go up again pretty soon.

Microsoft - How you doing?

I'm used to seeing MSFT trade between 27 and 28 and I see it at 23.87 right now. The 52 week low is 23.14. I say put a good till cancelled order at 21 bux. It may never be filled but if it does within the next two weeks, it will be a chance to make a quick 5 bux per share by end of 2006.

This is just common sense - we're talking about what used to be the #1 tech company where everybody always trusted the management. I believe a lot of their good people have moved on and the change in employees is a major cause for delays but there's this old saying "Every dog has its day" and I can tell you MSFT is a dawg that you never wanted to mess with and I would still stick with that stance.

All the recent gibberish about MSFT wanting some stake in Yahoo could make it such that it may never see the 21's.

Position: None
The writer had no positions in the stock mentioned above at the time of writing.

Update - International Clothing Play

Last week, I was curious to find out about international clothing plays and why people in Indian TV shows have been wearing GAP.

At this point, I'm not convinced that stores like GAP or Banana Republic would do well in India. The reason is that Indian clothing stores are Full Serve stores i.e. there is a person who helps people find what they're looking for. The new American model is long coming but I wouldn't move forward with a clothing play right now.

Position: None

Initiating coverage on AMTD at 18.37

On 4/24/06, I talked about AMTD. I said the stock may see mid 18's to low 19's before shooting up again.

I stick with my words and I think this is the bottom I'd buy it at.

Initiating coverage on AMTD at 18.37.

Position: None