Happy New Year

Penny Stock Watch - ONT

Today's penny stock spotlight is On2 Technologies(ONT), the Clifton Park, NY based software firm focusing on compression technology. The stock is up 9.8%, or $0.10 per share today as it partner with XM Satellite Radio(XMSR) for in-car video. The partnership puts the company in the direction for potential mega revenue gains. The radio end of the Satellite Radio business has already gained millions of subscribers and the new video market could also make a blockbuster hit which ultimately would lift the $1.12 per share company.

According to the technical chart, share of On2 Technologies has been trading above both 50 day and 200 day moving average, a very bullish sign. Postive MACD also indicates that the stock is a buy. Please beware of the KD line which is now at 80 and could signal a sell when it begins to fall.

Insider transactions are mixed of sells and buys so couldn't really tell how the top managment feel about the future of the company. Financial wise the company may see decline in revenue and profit unless the fourth quarter of this year has exceptional performance.

Penny Stock Watch - CTCH

If a stock is identified as a penny stock, it normally means either the company is too new to have any product on the market or the company was doing so badly that it got punished by investors. Most stock I found is the later one.

The penny stock we spotted today is no exception. Commontouch Software Ltd. (CTCH), an Isreal based anti email spam solution provider, was once traded $68 per share during the dot-com boom before the bubble burst send it all the way to about $0.06 per share in October 2002. Now after three years of fluctuating around $1 per share, the stock may be ready for a big break thru.

The company's anti-spam product should be getting more and more attention as addressing the increasing annoying email spam has become many company IT's top priority. Recent deals from AhnLab, Korea's largest security vendor on December 14 and from Rising Tehnology, China's leading antivirus vendor also meant Commontouch has positioned itself well in the Asia market.

According to the technical chart the stock has been on a rally recently trading above both 50 day moving average and 200 day moving average, a bullish sign for a stock. MACD and KD also indicate buy signal although ROC is showing the stock maybe overbought and could be in correction.

Financially the revenue, after bottoming in 2003 had surged five times in the following year. It would be interesting to see how the new deals would help the revenue for next year. The Cash Flow chart still shows risk to the stock with increasing net loss, liabilities and sales of stock which means the company still needs a lot of money. Nevertheless at this stage the company do needs money for expansion.

The shareholders have been selling the stocks this year but with no transactions from top executives it is hard to tell if the management team is bullish or bearish on the company.

Penny Stock Score (1~5) 5 is highest
1. News Buzz: 4
2. Technical: 5
3. Financial: 3
4. Market Potential: 5
5: Insider: 2

Penny Stock Watch - MDII

The penny stock which is making a buzz today is MDI Inc.(MDII), a San Antonio, Texas based firm which provides integrated security and system management software and hardware solutions for government and commercial organizations. The stock is up 54% today to $1.1 per share as the US Patent and Trademark Office has granted the company's new patent on video data storage. As digital surveillance and biometric related products become more and more important due to terroriest threat and tightening watch on illegal immigration, the penny stock company is on the right track with great potential.

On the technical side of the stock, although the 50 day and 200 day moving average still indicates weakness as the stock still trading below both moving average and 50 day MA has cross below 200 day MA, a bad sign for the stock, other indicators suggests that the stock should be ready for an upswing. With MACD is rising close to 0 and KD is rising towards 80, we should see stock doing well.

The top executives had exercised stock options recently which shows the management team is upbeat about the stock. The financial statement doesn't look too pretty as revenu and asset are still decreasing although net losss has been reduced as well.

Penny Stock Score (1~5) 5 is highest
1. News Buzz: 4
2. Technical: 3
3. Financial: 2
4. Market Potential: 5
5: Insider: 5

Penny Stock Watch - AXJ

Today we spotted a penny stock which sky-rocketted 150% today with promising news. AXM Pharma Inc(AXJ), a Las Vegas, NV based drug maker focusing on market in Asian countries such as China, Hong Kong, singapore, Thailand and Taiwan, gets approval of sales of its diabetes drug in China. The approval opens up a big market as statistics from The Asia Times records there are 90 million people with diabetes in Asia, including 23 million in China.

The technical side of the stock doesn't look pretty as indicators such as MACD, 50 day moving average and 200 day moving average all indicates continuous trend of weakness. The only technical indicator which shows signs of bullishness is Stochastics which suggest a buy on the stock as the %K and %D has rose from 20.

The fundamental side of the stock is terrible too as revenue, income and assets are still shrinking which is why the stock price keeps falling. Nevertheless people buy the stock for its future and big news such as this one should give investors plenty of hope.

Penny Stock Score (1~5) 5 means highest
1. News Buzz: 5
2. Technical: 1
3. Fundamental: 1

Penny Stock Watch - MCZ

The San Diego, CA based game maker MAD Catz Interactive(MCZ) has signed an agreement with Microsoft as an offcial software publisher for Microsoft's Xbox video game in North America and Europe. The news send the company 18% higher with 2 millions shares traded, seven times more than the normal 332 thousands average shares traded per day. The agreement could give a big boost to the game maker which generated 112 thousands last year in revenue. The company is a real penny stock trading below a dollar per share for the past four months and is still trading at $0.82 per share after the new accouncement with Microsoft. The company is also making game pad for PS2 and XBox as well as XBOX 360.

Penny Stocks Defined

Penny stock is defined as stock trading below $5 per share or in other definition trading below $1 per share. Although trading in penny stocks incurs great risk, yet as many stock trading veterans all know - the higher the risk, the higher the return.

Nevertheless what these veterans didn't tell you is that the risk should be controllable. We don't encourage you to jump right into any stock that trades below $5 per share. Yes you may hit the jackpot such as Netease(NTES) which trades below a dollar a share in January 2002 and is now trading at $56 per share, however something like this doesn't come oftena and you end up choosing something like Capine(CPNL.PK) or Curative Health Service (CURE). Picking penny stock without studying the fundamental and technical side of the stock is suicidal and is just like gambling, not investing.

Penny Stock Pick is aiming to minimize the risk of penny stock investing by going thru the available penny stocks and analyze it before making any recommendation. So good luck.