Aladdin Trading is a sub penny stock and I like the way it is currently setting up.  I am going to make this posting fairly brief and stick to the technicals instead of mixing things up with fundamental factors.

The only fundamental thing I am going to say about this pinksheet traded company is that it is in the import/export biz and focuses on unique niche foreign beer brands. Whew, ok got that out of the way… now on to my favorite part, the technicals.

By the way, before I get into the technical analysis of ADTJ, I want to point out that this site, the penny stocks alert primary focus is on the technical analysis setups of penny stocks.  It will and should be the primary focus.  It seems that time and time again I have learned this lesson the hard way, that every time I get too distracted with the fundamental picture of a pennystock, I end up getting either burned (read: losing money) or settling for a much lesser profit.

Fundamentals can end up clouding your brain with pie in the sky numbers! Beware!

Enough of that for now, but maybe I will get into it a bit more in a future post.

Anyway, back to ADTJ.

I like the setup in ADTJ as of this post because since the run began the stock has managed to trade sideways in a nice trading range without giving back to much.  This is key, because anytime a stock rallies and then enters into its first pullback phase I always LOOK with a keen eye to see how much the stock pulls back to define its new trading range.

As a general rule for me, the more a stock pulls back on the first retracement, the less attractive the stock is.

The BEST stocks pull back the least and do the smallest retracements. When they do these small retracements it shows the stock is in strong hands and there is a built in strength to the stock.  It can often hint at the power of the next leg up.

So ADTJ according to my charts has so far only done a 50% fibonacci retracement from where the rally began to the high of .0031.  In the land of sub penny stocks that is a pretty good feat to accomplish! It is one of the reasons I like this stock.

A 61% fibonacci retracement is pretty common as well and is not the end of the world. But what would you rather be the owner of, a penny stock that does a 50% retracement after its first rally up, or a 61% retracement? I thought so…

So we have the 50% retracement showing nice built in strength, and we also have a trading range with a high of .0031 and a low of .002.  That is the magic trading range on ADTJ.  It has been bouncing back and forth between there like a basketball and what this tells me is that it is building cause for the next leg up.

But note! This supposed next leg up is not really activated until we see a break of .0031 on the upside with good volume.  I really do not know how much longer it will bounce within this trading range.  And keep in mind that we cannot rule out a downside break of the trading range below .002. 

Right now it looks like it wants to break .0031 resistance and start the next leg up.

It closed Thursday February 27th, 2008 at .0027.

So in summary what is needed is a break of .0031 with good volume and once (if) broken a solid close for that day.

I DO NOT like to see a stock break out of its trading range and then close near the low of the day or end up back inside the trading range. If that happens, it is bearish and sometimes leads to a move back to the lowside of the range, in this case .002.

So a clear and sustained break of .0031 is what is needed with ADTJ. If it does that then I do not see much resistance until .01

Ok, now that I got your attention.

This OTC BB penny stock , MSTF ( Monarch Staffing) is on very high alert status going right into the 3 day presidents day holiday extended 3 day weekend.

Now you might be asking yourself right now, why on earth am I talking favorably about an OTCBB penny stock on a Friday, and a Friday that is before a 3 day weekend?

It seems nuts, I know. Normally Fridays are slow, lower volume and generally a bad time to initiate any new positions or hold positions for that matter.

But I can tell you with zero doubt, that MSTF has a very high probability of being the exception to this rule.

Right now MSTF is trading at around .01, there are two on the ask at .01 and 3 on the bid at .009.

MSTF again is an OTC BB Stock, so why do I keep mentioning that !? I do because compared to NUBV which I mentioned in a couple previous postings, MSTF since it is OTCBB actually has sec filings and has been good about putting them out.  If you check on yahoo finance you will find that there have been zero press releases.  So what can be discovered from the filings?

According to research from some IHUB members, namely $oldier Hard, realest, bagfull and john wayne.  These guys did some outstanding research on the ‘behind the scenes’ activity through the filings that seems to suggest that MSTF is either going to be acquired by AccentCare ( A 120 million dollar a year business in the senior caregiving biz), or that some sort of reverse merger may take place where by AccentCare gains a quick entry into the public markets. The reason that speculation is coming about is because a number of top executives including the CEO of AccentCare are on the board of directors of Monarch Staffing.  So you really have to put 2+2 together here that something is up.

It is interesting that AccentCare is in the senior caregiving biz, and that Monarch Staffing is in the medical staffing biz. Seems like a perfect fit to me because one of the most pressing functions of any healthcare caregiving type organization is staffing. It is a big issue, and I know because I worked in that field for a short while many years ago.

In addition, a recent SC 13G filing from which came visible on February 6th, 2008 shows that Knight Equity Markets, L.P., formerly Knight Securities, L.P, owns about 13% of the outstanding shares.

Now you tell me, why an high class market maker would take that kind of stake in an OTC BB? hmmmm.

The other big deal is that MSTF has a small total Outstanding Share Count.  Indicated is 30 million, but could be between 30 million and 50 million.

So look at some possible market cap values based on price and various Outstanding Shares totals:

So as you can see, we really DO seem to have a stock that looks very much undervalued here based on a number of different factors, and I have not even begun to talk about the technical analysis aspects that make this a stock chart that is second to none!

Most of the float appears to be held in very tight hands right now. And currently as I type right now, price is holding VERY WELL for a Friday, and a Friday before a long 3 day uncertain weekend too.

There is also an extremely interesting possible cycle analysis which I noticed going back exactly one year on MSTF that seems to suggest an almost exact repeat of what happened back then, will happen again in the current time frame.

It really is a fascinating type of correlation and is only something you would notice if you have been following markets long enough to understand that sometimes things beyond just fundamentals or technicals rule the marketplace.

Just as a hint, look back exactly one year from this February 2008, all the way back to February 2007 and see if you can find any parallels.  Use the Presidents day holiday weekend in both years as your guide.  More on this later.

But for now MSTF is looking very strong with strong support, good volume behavior, price action before the weekend and setup for next week.

Of course I cannot tell you with certainty that MSTF Monarch Staffing will be bought out!, or that a Reverse Merger will occur.  That is speculation, but it is informed speculation, not just reckless speculation.

How high could MSTF go?

I really do think MSTF has a strong chance at reaching its 52 week high of .15 cents again, and it may get there a lot sooner than you think.

But for now, I will put a target between .05 and .15

After you look at the market cap chart above, my targets may actually be conservative.

I will try to get into a few more details about the technical picture on a future posting.  From a technical standpoint, this penny stock chart is about as good as I have ever seen.  It has so many elements necessary for a good run. And to find a chart, and a story like this one in combination is quite a rare thing indeed.

Peace…

When I first mentioned Nutripure Beverages over here at the Penny Stocks Alert it was trading at around .0003 .  Not too much time passed before it started building an uptrend, all the way to an intra day high of .0014.

So percent return range from .0003 to .0014 is 366%.  But of course it is usually impossible to sell the tops and buy the bottoms.  But any percent return between 1% and 366% is just fine with me.

The problem with NUBV seems to be the dilution issue. All the while I was watching this stock trade on Level II, it really seemed obvious that the enormous amounts of volume would be hitting the ask and yet the ask took forever to move. But then, the moment the bid was hit with a few sales they immediately thinned it out.

That type of action seemed to be happening almost all the way up.

In addition, the breakout above .001, while on extremely heavy volume was honestly somewhat disappointing.  When you great a breakout of a significant resistance line, you really want to see wide price bar spread combined with the volume, not just the heavy volume.  The reason is that if you do not get the WIDE price bar spread, or wide enough that is, then it starts to become obvious that what is happening is something called ’shortening of thrust’.  Basically it means that all the big buying power is being ABSORBED head on by selling and preventing price from advancing.  It is usually a very bad sign and probably a bad sign of heavy dilution as well.

The RSI on a daily basis was still around 50 range when we were in the breakout area… so it did have me thinking that NUBV had a lot of room to run before being overbought.

And after that so called breakout, I really DID want to see that NUBV could now hold support at .001.

But guess what?

It did not hold that support that good and it started becoming sloppy.

BZZZZZZZZZZZZT !

Wrong.

After it started to fail at holding that support after the supposed breakout, the red alarms should have been ringing in your head.

Surely it seemed that NUBV had some sort of ’story’ going for it. They have a patent for what seems like a great idea and a great product with a possible bright future.

But with the bloated capital structure, the heavy dilution and the questionable trading behavior, it is time to look elsewhere.

But still! Even after all that heartache, as a careful and prudent trader you most likely could have snatched between 10% and 366%.

NOT BAD.

Nutripure Beverages is a penny stock that trades on the pinksheets and is the result of the former Liberty Diversified Holdings buying out XNG technologies with the intent of focusing entirely on the enhanced bottled water market.

The Nutripure Beverages site has not gone live yet, but here is the link to it.

NUBV is the new symbol and Steve Nickolas will be the man in charge (CEO). I did a light background check and it appears he has a good amount of experience in the bottled water industry.  In addition Nutripure Beverages claims to be the only company that will provide nutrient enhanced bottled water without the need for masking the nutrients or vitamins with flavor enhancers, artificial colors and other nasty masking agents that consumers seem to be getting smarter and smarter about. Their product will be called Nu20 ‘nutrient enhanced water’.

Here is a wallstreet.net interview with Steve Nickolas.

I was not aware of this previously but apparently the nutrient enhanced bottled water market is a very hot market by any industry standard.  This is no dot com industry, and yet the company that makes Vitamin Water which was recently bought by Coca Cola had somewhere near 100% growth in sales I believe.

  So the space is definitely interesting, and timely too given how environment aware consumers as well as government seems to be these days.

NUBV has a patent for the process I talked about above so their product could definitely have a unique position in this market space if marketed and distributed successfully.

Anyway, enough of the fundamentals. I looked at the chart and this is definitely a stock that has plunged very far and very fast.  I should also mention that the stock has had more reverse splits than I would like to see in any penny stock.  Having said that, I am going to try to judge the chart as if it is the only thing I have knowledge of so it will keep me focused on technicals.

Ok, onward to the technicals. Despite the horrific decline and extremely persistent down trend, NUBV could be at its all time low. I decided to look at the weekly chart of NUBV and plot it against the weekly stochastics indicator. Stochastics is in my experience a very jumpy indicator on the daily prices.  So a weekly helps to smooth out the rough edges and gives a little better predicting power.  Anyway, I noticed that we may have a possible bullish divergence in NUBV which could give cause to NUBV being at a significant low right now.  Most recent price was .0004 as of January 31, 2008.

If you have never heard of a bullish divergence, it is simply a condition in any stock price chart when you have a rising slope in an indicator and a falling slope in price or vice versa.  In this case I see that we have a rising slope in the stochastics indicator and a falling slope in price. As I indicate in the chart to the left, this usually means that price will have to resolve itself in the opposite direction to make the divergence valid. Bullish divergences like this only work if this stock has stopped its bear market decline. How can we be sure it has stopped its bear market decline? Well I cannot yet at this point.  But it looks promising at least as of this update.

There are a couple things on the daily chart that hint to me we could be ready to advance. One of them is the macd histogram which on the daily chart seems ready for a bullish crossover of the zero line.  The other is the huge volume surge in recent 2 months.  A somewhat similar pattern developed in the now successful WNBD stock that advanced from a low of .0003 to almost .03 cents, a truly astounding run.

I am researching a similarity in the weekly candlestick charts of both stocks and will report back here if I see the similarity leading to some more meaty conclusions about what might happen with NUBV. More specifically what I am looking for is a weekly close of .0005 or higher on Friday, February 1st. If NUBV can do that then it would create a bullish hollow candlestick, similar to what WNBD was able to accomplish before it’s huge run. More on this later.

For now though, the chart does look promising but needs more confirmation and a bit more work.

The action on Friday, February 1st could very well be an important turning point for this stock.

I am not sure what I like the more at this point, the technical story or the fundamental one.  NUBV clearly has the potential to become a ’story product’, because of it’s unique niche and potential mass market appeal in a market that is very hot right now. But executing on that market is a whole other matter.

So keeping this one under close radar, and will likely do an update on it at some point.

RVGD has done really well since the previous post on this stock. It is quite amazing actually that it played out so predictably.

In my previous post I talked about how it needed to rally real strong back to .0034 level to give it a good shot at making a breakout type run like it had in the past. 

RVGD did exactly what I asked and surged with big volume since then all the way to an intra day high of .017

The .017 price gave an RSI reading very near the 80 range which was clearly an overbought level on the daily charts. By the way, RSI in my past experience is a great tool to use to help determine exit points and maximize profit.  Anything between 70 and 90 is a good excuse to take profits.

This entire run began quite early and was motivated by a pretty significant press release about a large revenue generating contract which came out the day before the price peak day.

So this was definitely a good setup. Does it have more to go? I really can’t say for sure.  It is possible that RVGD will not build a symmetrical triangle pattern and try another run at .03, but for now it is clear that a lot of energy has been ‘used up’ from this 6 day rally.

From the .0035 level when we first started talking about this penny stock to the .017 intra day high, that equates to a 385 percent increase.  Not a bad return at all, and once again proves the point of the amazing returns possible with penny stocks.  But of course I would be remiss if I did not also mention the possibilities for huge losses as well.

Timing is definitely priority one in the penny stock marketplace!