In This Edition...

• Sector Outlook: Strength in Surprising Places
• Review of Recent Chart Analysis 
• Updated Watchlist 

What's Hot - and Surprising - in the World of Small Caps?

You know what's been coming on strong lately from the small cap world? It's not necessarily energy or basic materials (though those certainly haven't been disappointments). 

No, one of the more obscure small cap opportunities floating around right now is the uptrend from certain segments of the healthcare sector... but not the entire sector. 

Biotech's recent success is a given. Good news from Dendreon about immune therapy, and several possible swine flu treatments, have ignited all those stocks. It's an artificial strength though, and one we're not sure has a future. 

The hot spots likely to have real longevity are healthcare equipment, healthcare technology, and healthcare supplies. This specifically excludes healthcare facilities (overbought), services (slightly overbought), and distributors (laggards). There's nothing particularly wrong with the other three small cap groups - they just aren't as attractive or strong right now. 

The nearby chart compares the recent percentage returns from the small caps (S&P 600 constituents) of all the afore-mentioned groups against the broad S&P 600 Small Cap Healthcare Index, as well as against the S&P 600 Index itself. The 'start date' is the March 9th bottom. 

But wait a second... aren't the alleged hot spots actually laggards since then?

In terms of results since early March, yes, we specifically suggested the trailing groups. But if you look closely, you can see the former leaders are starting to weaken, while the former laggards are starting to curl upward. See, you don't want to own prior winners - you want to be in the next winners. 

Just to make the chart analysis a little more up-to-date (and to make the point), we'll scoot the start date forward to the market's May 8th peak, and redraw the chart. With this more recent time frame we can see the small cap healthcare suppliers, equipment, and technology stocks have emerged as new leaders. The key here, however, is that this appears to be the beginning of a trend rather than the end of it. 

Though no tool is foolproof, this visual relative-strength analysis has been outstanding with helping us stay focused on the best of the best emerging trends. There will certainly be more ups and downs (like today's down, for instance), but the bigger trends are still clear. 

By the way, you could make the argument that the small cap healthcare technology industry is just as overbought as small cap healthcare facilities are, and you'd be right. There's a difference though - the technology stocks are still making gains despite the headwind, while the facilities stocks are clearly retreating now. 
 

Check-in/Check-up

The complete watchlist is below, as always, but a couple of tickers on the list as well as some of our prior focus stocks deserve some special attention. 

ParkerVision Inc. (PRKR) 

For some reason or another, this stock keeps making its way back onto our radar. It got our attention about a month ago, but proceeded to work its way into a consolidation mode. As of Thursday however, the upper boundary of that sideways zone (around $3.60) is being pressured again. If that line breaks - and that's a big if - we can't help but wonder if the April rally will be resumed. 

That said, PRKR is going to have to find some more volume/buyers if it's to have a prayer at breaking out. 

Mirani Brands Inc. (MRIB) 

We've been tracking the potential breakdown of MRIB shares for about three weeks. Support at 25 cents was holding up relatively well (which was the key), but that floor's finally started to give way - we saw shares hit a low of 17 cents this week. 

That may only be an 8 cent dip, but it's also a 32% dip.... not bad for a penny stock scalp trade. We think there could be more downside to go though. Just play it tight if you're in a position. 

Other Recent Discussions 

We're dropping Riverview Bancorp Inc. (RVSB) as a bearish candidate. The support at $2.90 never broke; we're even starting to see some buyers test the waters. 

Herzfeld Caribbean Basin Fund Inc. (CUBA) - the breakout ETF we detailed last week - stalled out a couple days after our look. It's not a cause for alarm. 

Though Spreadtrum Technologies Inc. (SPRD) shares didn't move much following last week's earnings announcement, something finally took hold on Tuesday.... SPRD soared from $2.40 to $3.05 in a day (it was at $1.95 when we first looked at it). The delayed reaction was still a good profit-taking opportunity though. We suggest you do so now if you haven't yet. 

We added Flow International Corp. (FLOW) back to our focus watchlist last week, though it hasn't done much since then. It's still on the table, but FLOW's got to knock out the ceiling at $2.80 for us to get excited. 
 

New Arrivals

And what about the newest charts worth our closer inspection?

Neogenomics Inc, (NGNM) 

When we first added Neogenomics to the watchlist as a bearish possibility, support at $1.30 was still intact..... barely. Since then we've seen several trades under $1.30; Thursday's close of $1.26 clinched the opinion. 

Our only concern is the gap between Wednesday's low and Thursday's high. Will the market try and close it? Perhaps, though the bigger-picture damage has already been done. 

As for possible landing spots if this pullback gets traction, there seems to be a floor at 92 cents. If that line fails, the next base looks to be somewhere in the 62 cent vicinity. 

Petaquilla Minerals (PTQMF) 

We've never been big fans of gold mining stocks... too much volatility due to too much hype. We are fans of good-looking charts though, and PTQMF certainly has one of those. 

In the very short run, Petaquilla looks overbought because it is overbought. From a longer-term point of view though, the current price of 63 cents is still miles away from the late 2007 high around $3.25. And, with shares continuing to make higher highs on rising volume - albeit it in a stair-step fashion - it's tough not to like the possibility. 

If you're interested, you may want to wait for a pullback, or you may want to wait for the 20 day moving average line to 'catch up' so it can play a support role. We're getting close to seeing that happen today. 

International Coal Group Inc. (ICO) 

Yesterday, ICO gave us one of its highest volume day in years. Why? Because James River Coal was upgraded due to a likelihood it would be acquired, and International Coal is simply a close cousin. Such is the power of industry influence. 

That alone wouldn't be enough for a highlight though. We're also impressed with the way the high volume rally pushed the stock above a prior resistance line. 

In the grand scheme of things though, even that's not the compelling part. 

While all stocks basically deserved to suffer during the 2008 recession, coal stocks gave up more than their fair share of value. Now that the economy is starting to look better again - not to mention coal prices rising again - these severely undervalued stocks are also apt to recover the most ground in a fairly short period of time. ICO is no exception. 
 

	This Week's Watchlist

Notice we're dropping a bunch of tickers from the watchlist today. Though we do advocate looking at a lot of ideas, dwelling on too many ideas can just be distracting. We'll keep the ones worth watching, and drop the ones that don't look like they're going to move. Doing so makes room for new additions (and we had a handful of new ones to add this week).

• Richardson Electronics Ltd. (RELL) - being taken off the watchlist today 
• U.S. Gold Corp. (UXG) - looks like the wedge breakout is getting traction after all 
• Gabelli Healthcare & Wellness (GRX) - higher lows, resistance is now at $5.15 
• G-Willi Food Intl. (WILC) - still climbing, though at a snail's pace 
• Flow International Corp. (FLOW) - eased a bit, bit working on a higher high again 
• Intricon Corp. (IIN) - we're taking this non-mover off the watchlist today as well 
• Aristotle Corp. (ARTL) - another modest pullback to the rising support line 
• Collectors Universe Inc. (CLCT) - volatility wrecked the chart, so we're dropping CLCT today 
• Herzfeld Caribbean Basin Fund Inc. (CUBA) - stalled after the breakout 
• Oxygen Biotherapeutics Inc. (OXBO) - not enough action here, so we're dropping it today 
• JAG Media Holdings Inc. (JAGH) - still a significant pullback threat 
• Far East Energy Corp. (FEEC) - the bears took a shot, but the uptrend is still alive 
• China Tel Group Inc. (CHTL) - last week's volume did nothing for the chart, so let's drop CHTL 
• Solar Power Inc. (SOPW) - after we mentioned it last week, it flew from $0.78 to $1.16 
• Neogemomics Inc, (NGNM) - support at $1.30 is still being tested... and failing 
• Pacer International Inc. (PACR) - flat-lined, let's axe it from the watchlist 
• Oncothyreon Inc. (ONTY) - still testing support at $2.54 
• Affymetrix Inc, (AFFX) - Yep, looks like the drought is over. May be a little overbought right now 
• New Emergy Technologies Inc. (NENE) - peaked above its consolidation range today
• PolyMedix Inc. (PYMX) - support at $0.63 is hanging on by a thread
• Petaquilla Minerals (PTQMF) - regardless of the fundamentals, the chart's U-shaped reversal looks good
• China Pharma Holdings (CPHI) - starting to recover from May's big dip
• VCG Holding Corp. (VCGH) - The consolidation/wedge may finally be yeilding to the bulls
• Fieldpoint Petroleum Corp. (FPP) - There's strong resstance betweem $2.50 and $2.60
• International Coal Group Inc. (ICO) - nice breakout move on Thursday, with volume, on someone else's news 

	We Value Your Feedback!

Got comments, questions or suggestions? Send 'em on over! We appreciate the time and effort that goes into sending us email. We will review each email as promptly and acutely as possible, and reply via email when appropriate. Just click on the mail icon below. 

Micro Cap Press Editor

	Subscribe

The Micro Cap Press is a complimentary e-newsletter and website devoted entirely to identifying the world's best small and micro cap stock trading ideas. We aim to uncover these ideas and provide in depth research coverage in an effort to help our readers generate above average returns. There is no cost associated with your email subscription. Add your email address below and make sure to check your email inbox and confirm your opt-in request to start receiving the Micro Cap Press Newsletter on a regular basis.

To ensure newsletter delivery, you can add any additional email addresses you may have to the Micro Cap Press Member List. Receiving the Micro Cap Press Newsletter in multiple locations is the best way of making sure you don't miss an edition! Ensure delivery by reading our article on white listing by clicking here: http://www.microcappress.com/whitelist/

Note: Your email address will be kept strictly confidential. If you no longer wish to receive the Micro Cap Press Newsletter, simply follow the instructions located at the bottom of every Micro Cap Press Newsletter Edition. We honor all removal requests.

	Refer A Friend

If you find the Small Cap Network Newsletter informative and profitable, please forward our newsletter alert service to like-minded friends and associates who share similar market interests.
 

	Ensure Newsletter Delivery

To ensure newsletter delivery, you can add any additional email addresses you may have to the Micro Cap Press Member List. Receiving the Micro Cap Press Newsletter in multiple locations is the best way of making sure you don't miss the next investing or trading opportunity! For web based email addresses, the Micro Cap Press recommends @yahoo.com or @aol.com for timely and reliable email newsletter delivery.

Click Here or go to http://www.microcappress.com/disclosure/ to view our compensation on every company we have ever covered, or visit the following web address: http://www.microcappress.com/disclosure/reports_disclosure.php

Pacific Shores Investments, LLC has been paid a fee of $25,000 in cash and 50,000 shares of China Energy Recovery for coverage of the Company. In addition, the Managing Member of Pacific Shores Investments, LLC has purchased 40,100 shares of China Energy Recovery in the open market with a cost basis of $1.87 per share. All of the aforementioned shares may be sold at any time without notice. Transactions are disclosed and updated weekly on the web site.

From time to time PSI sells shares received as compensation for coverage of client companies. Shares received are sold in the open market. Since the shares are received as compensation for services as previously disclosed, and not for investment purposes, PSI does not view the sale of the shares as contradictory to any opinions delivered in the content. This should be viewed as a conflict of interest by shareholders or prospective shareholders of the client companies. 

PSI, its Members and Members' families, are forbidden by company policy to own, buy, sell or otherwise trade stock for their own benefit in the companies who appear in the publication unless specifically disclosed. 

All statements and expressions are the sole opinions of PSI and are subject to change without notice. A report, description, or other mention of a company within MCP is neither an offer nor solicitation to buy or sell any securities mentioned. While we believe all sources of information to be factual and reliable, in no way do we represent or guarantee the accuracy thereof, nor the statements made herein. 

The reports, critiques, and other editorial content of MCP may contain statements that appear foward relating to the expected capabilities of the companies mentioned herein. 

THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. THE INFORMATION FOUND IN THIS PROFILE IS PROTECTED BY THE COPYRIGHT LAWS OF THE UNITED STATES AND MAY NOT BE COPIED, OR REPRODUCED IN ANY WAY WITHOUT THE EXPRESSED, WRITTEN CONSENT OF PSI. 

We encourage our readers to invest carefully and read the investor information available at the web sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov and/or the National Association of Securities Dealers ("NASD") at http://www.nasd.com. We also strongly recommend that you read the SEC advisory to investors concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm. Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published information on how to invest carefully at its web site.