Sub Penny Stocks

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.

I was watching Revenge Designs trading today because it seemed to have a nice setup and a possible break out from .0035 resistance.  The chart seemed to hold a lot of promise because in past 2007, RVGD had two previous huge spikes so it has already shown that it has the real ability to get a good rally going.

Also notable is the huge surge in volume during the last 30 days and that happening under the longer term resistance line of .0035.  I usually like to see big volume under a longer term resistance line because in some cases it supports the idea that pressure is building up under there and will make the breakout that much better.

Anyway, as far as today’s action goes, it was extremely volatile for RVGD.  Make no mistake, volatility in the penny stock markets is pretty much a guarantee, but occasionally you even see it ramped up to a much higher degree than expected.  That was definitely the case today.

RVGD made a minor surge today to test the previous near term resistance high of .0034 during the first half of the trading day.  But almost immediately upon hitting that level a massive sell off ensued sending RVGD down very hard to an intra day low of .0015.  A few seconds after hitting .0015 RVGD rocketed higher like it had just touched it’s toes to a bed of hot coals.  The reaction rally send it back up to about .0027 and then we saw it drift down into the close to settle at around .0022.

Can RVGD still make a breakout above .0034 this week ?

That is the ultimate question, and the answer depends a lot on whether or not RVGD can pull a rabbit out of the hat and again find a way to rally and breakout higher similar to the way it did in November 2007, the previous huge spike higher.

If you look closely at the chart you can see that right before the huge November rally higher there was a very severe shakeout that slammed price right down and retraced almost all of the previous 5 days. Was today’s action a repeat setup of what happened in November 2007? We sold off very hard and recovered a good portion of the losses today.  The price action does look very similar to the setup in November.

The bottom line is that if the scenario is going to play out again, then I would say we need to see within the next couple of days a resurgence back to .003 and then quick rally higher.  If anything less than that happens, RVGD may be dead money for a a good while longer.