Penny Stock Pick - EMRG

ID for Animals eMerge Interactive Inc(EMRG), the Sebastian Florida based company making animal tracking and database management for feef industry, got massive pre-market trading today after a report saying U.S. livestock may get individual identification numbers. The stock is up more than 10% today as close to 3 million shares, almost four times average volumn, have traded so far. The news may spark rally for the beaten down stock which has lost more than half of its market cap for the year.

Technical
The technical chart shows weakness as the stock is trading below both 50 day and 200 day moving average. Technical indicator MACD also shows the stock is on a bull market as the on a bull market as the signal is well below 0. One positive indicator is the KD line where K line is rising on top of D line generally meaning buy signal. However unless the stock can break above 50 day and 200 day moving average any rally is considered bounce back in a bear market.

Insider
There is no significant activity from the insider transactions recenty.

Financial
Although the company was getting sharp descrease in revenue for 2003 and 2004 comparing to 2002, the revenue for 2005 should improve for 2005. The additional private placement financing deal in January worth $3.2 million should also improve the balance sheet and the working capital as the company is still having steep operating losses.

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