Penny Stock Pick - OTD

Clean Fuel! The penny stock company on the spotlight today is O2Diesel Crop.(OTD), the Newark, DE based company which develops fuel additive product that will allow fuels to burn cleaner. The product may be used in truck, agriculture and construction equipment, power generators or mining and forestry equipment. Today the stock surged 16.81% or 19 cents to $1.32, rising for the third straight session this week from the closing price of 78 cents last Friday. As the stock has gained 70% so far, let's take a detail look at the company to see if it is worth buying.

Technical
The technical chart shows major rally may be coming as the stock is now on top of 50 day and 200 day moving average with 50 day moving average rising. If 50 day moving average can break above 200 day moving average to form Golden Cross, then we can confirm that the stock is back to the bull market. Other technical indicators such as KD line and MACD are both bullish as K line is rising on top over D line and MACD is on top over the signal line, both showing buy signal. However ROC shows the stock is overbought so correction could be expected as the stock is approaching the Golden Cross.

Insider
The most recent insider transaction was selling of 44,667 shares back in December of 2005. The institutions, however have purchased 19,286 shares in the most recent quarter.

Financial
Since the company is still in the development stage, little revenue is expected from the income statement. The balance sheet has improved in the most recently quarter on increasing cash as the company raised more cash thru selling of stocks. There is still the risk of more stock dilution if the company is in need to raise cash to pay the quarterly operation expense about $1.7 million dollars.

Penny Stock Score (1~5) 5 is highest
1. Market Potential(green fuel): 4
2. Technical: 4
3. Insider: 3
4. Financial: 2
Recommendation: Buy