[ Rainier's Pick: Fundamentally-based, Intermediate Term Pick # 1]
Bid: 15 1/8
Ask: 15 3/8
6-8 month target: $22.25
I currently find the most fundamentally attractive issue in the small cap market to be Equinox Systems (EQNX). Please see my discussion today with the company management, and for a look into the workings of the company:
exchange2000.com
Please note that this is not the first time I have been exposed to the company. I have been following this issue since May 9, 1997, when I issued the following recommendation on the Equinox thread:
exchange2000.com
For now, my forecasts have proven accurate--my revised $19 price target(you can look for it in the thread somewhere, if you really want to) was right on the nose before the issue experienced weakness. Regardless of the technical observations, I believe the sudden selloff may have been unwarranted for reasons I present in my most recent post about the company.
Technically, as Glen and I observed, EQNX experienced a Bull Trap, resulting in a 24.2% decline from its peaks. Today's chart shows what's called a Tweezer Bottom, in Candlestick terms. It represents an area of support (you'll note that support was already established at this level on 9/24/97). In addition, in the face of today's weakness, the company stepped in to purchase a 100,000 share block, as part of a stock buyback program(details are in the above links). There is still another 100,000 share block still unaccounted for, if it was not purchased by the company.
As this is a small cap issue, it would not serve the buyer's interest to have everybody rush in to push up the price in a sudden manner. Should one take an interest in the issue, a gradual scaling in would perhaps be the best way to take advantage of any further weakness in the course of its advance.
Any thoughts on the issue would be welcome.
Regards,
Rainier |
