[Intuitive Pick] Netgear’s WiFi Phone

Want to hitch a ride on one of the fastest growing small caps out there? Netgear is a very very very rare small internet company that is making profits. Lately, Netgear is taking positive steps to take advantage of voice-over-internet-protocol technology. Their latest [intuitive] product is their VOIP wireless phone. Netgear’s CEO, Patrick Lo, is hoping to grab a huge chunk of Skype’s users… that’s a huge chunk of a huge chunk! How huge? Skype flew past social net site MySpace with 113 million users worldwide. Lo hopes to attract about 12 million users. What a smart move- let big boy eBay dish out the $1 billion to promote Skype, then hitch a ride on the hype for a much smaller cost (I just realized ‘hype’ rhymes with ‘skype’; did I spell rhymes right?). I also like Netgear’s lifetime chart, which is trending up, but has clearly formed a resistance at about $25.

Anyway, although it’s a speculative pick, it’s not as risky as they usually get. To me, Netgear is becoming a high tech household item.

Things to watch if you invest in Netgear’s WiFi phone:

• Cisco’s (CSCO) performance – the king of networking technology has the power to drag down the sector, destroy small caps, or the opposite.
• Skype news headlines- because VOIP is a new technology, there will be all kinds of praises as well as skeptical disdains with internet phone use.
• Competition- none so far now
• Technicals- volume is at record highs. Beware of $17.50 support; go strong over $24.

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Just updated the performance page. I did okay, considering the Fed reported this week. Very nasty movements in overall market engendered by fluctuating oil prices and gold prices, attempted terrorist attack, and the shut down of a major U.S. oil field in Alaska.

-Gio

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Turns out last nights drink off with my Italian friend wasn’t such a good idea. For some reason I couldn’t sleep the whole night.

Anyway, another rough day in the market…

… saw my profits in USG come down as fast as it came up, in just two hours! Lesson: rallies without volume are weak.

… I waited the whole day to get a profit shorting BDCO, then when I did, I left the room, came back, and I was down. Say what?!! I covered my position in the final 2 minutes since they’re supposed to report Monday or something (such a crappy company. I’m still bearish all the way to $1, but I don’t want to fight whoever is manipulating this).

… Best trade of the day would have been to short XNL after the spike on a rebuttal transcript (weak). I watched the bids get slowly raised, then it started to head back down. I’ll be keeping an eye on this one for a few days. Bearish- reminds me too much of Medifast.

… Covered my swing trade in MasterCard (MA) and Sunoco (SUN) because they managed to break through resistance AGAIN!

… Gold shot up, then completely reversed sending gold stocks into one crazy ride.

… things are not looking good for TIE. The stock never recovered at the end of the day with the Dow as it usually does. I’d switch to bearish, but it’s a bit oversold.

… Ilumina (ILMN) continues to fall after failing to break through resistance a few days ago. Missed opportunity.


WOW, MY HEAD HURTS. TIME TO SLEEP.

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I drank too much last night, so now I can’t sleep. I’ll find out soon if trading and alcohol mix.

Click [here] for 5-day quotes of Watch List

• Nvidia (NVDA) – got hit after hours. Lost of buyin pre market, but price still close to low.
• Apple (AAPL) – related to Nvida, but they have their own problems. Stated to SEC they “will likely need to restate certain historical financial statments” related to stock option grants.
• Juniper (JNPR) – has same filing problems as Apple.
• Focus Media (FMCN) – waiting for RSI to drop. Bids are very fishy lately, especially heading into earnings next week.
• American Science & Engineering (ASEI) – for the next few days we’ll see where the true stock price will be.
• Hansen Natural (HANS) – could this be the bounce? Shorts covering before the weekend sounds likely.
• Leading Brands (LBIX) – copies whatever big brother Hansen does.

Other Links…

• The Big Watch List [IntuitiveTraders]
• A great post by Ugly [Ugly]
• CramerAlerts gets shut down! Boooo! [Fly]
• Yesterday’s Strong Closers [Fly]

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We’ve heard so much about terrorism, well after British officials thwarted terrorist attempting to fly to America, you can be sure the security stocks will be flying for the next few days. There’s a lot of wannabe security stocks out there, but the one company with real and great prospects is American Science Engineering (ASEI). This was actually a Motley Fool Rule Breaker Pick back in February 2006, but they were ahead of their time. The stock got hit hard a few days ago after reporting a loss. But that dip in price turns out to be a great opportunity for new money. I rarely see a combination like this:

• Terrorism awareness is becoming greater due to tensions brewing in Middle East and Afghanistan.
• An actual terrorist attack was thwarted today in England
• American Science Engineering (ASEI) got hammered two days ago after reporting earnings sending stock to its 52-week low! Read: Super cheap.
• ASEI was extremely oversold yesterday.
• ASEI gets two upgrades in one day, today: “Buy” by Roth Capital, and “Hold” by Stanford Research.
• And for future prospects, we can expect the U.S. to increase airport security standards

The stock is already up over $8, and there are no resistances until it fills the gap around $48! (Sorry, can’t post the article. Not in the mood to get a cease & desist letter).

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Wow, I’m tired. I just got back from the beach at Ko’olina, one of the nicest beaches you can find on Oahu! The water was perfect… a school of tiny fish was swimming with us… had a picnic with friends from Cali… and stayed until the sunset, one of the best places to watch the sunset in the world (I didn’t say that, but I do agree). I never thought once about the stock market.

Anyway, I came up with a fresh watch list for the next few weeks. I’ve been seeing all types of stock setups that are developing, so much that I need to cut down my watch list. In reality, I think I’m getting too excited about too many stocks, so I’ll be reading this post before the market opens.

Ahead of the Ticker

the Markets

• Tomorrow will be an interesting day (the second day after the Fed… I’m going to use the post-Fed counter here, pretty soon you’ll hear other people do the same too). It looks to be another rough day of trading in the making. Premarket futures are down pretty hard, with the Dow -66.00 at 4:16am, and the Nasdaq -9.25 4:16am. If you look at the global index, almost all of them are in the red!

Oil

• Oil seems to be trading flat overseas, stuck at around $76.35. The spikes in oil stocks across the board in the past few days were attributable mostly to the Alaskan oil shut down. But with news of oil sources from Asia, we could see the momentum start to fade.
• Aug 9, 10:30 AM we’ll get announcement of crude inventories. This will be especially important after the BPT news.

Gold

• Pretty flat, trading above and below $650. But with the dollar slipping, we could see a mini rally.

Companies in Focus

• Imax Theater (IMAX) – fell over 30% after hours. Wow.
• JC Penny (JCP) – a surprisingly successful retailer that looks to be copying Sears. Maybe. We’ll find out tomorrow, they report 9:30 am. Expect a transcript before the bell.
• Sunoco (SUN) – stock is at 70 RSI, very overbought. 8 straight days in the green after reporting great earnings. People expecting a pullback soon.
• SimpleTek (STEC) – good earnings yesterday, but they already announced the positive news a few weeks ago. I’m keeping an eye for a sell-on-the news scenario.
• NVidia (NVDA) – stock is trying to gap up. Tomorrow they report. August 25 Puts were very active ahead of earnings… that seems to be a good move, especially with the ugly way the Nasdaq and semicondutor stocks have been acting.

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