As the market and economy continue to improve for the better, the quantity and quality of micro cap stock stories also improves. Now that we have more to talk about, we plan on posting these ‘mover and shaker’ updates on a regular basis. It’ll be the hardest-hitting micro cap and penny stock news of the day.

For today, Universal Detection Technology (UNDT.OB), Medefile International, Inc. (MDFI.OB), SpongeTech Delivery Systems, Inc. (SPNG.OB), and our old friend Stratos Renewables Corporation (SRNW.OB) made the top spot. Let’s take a look at what’s going on with each one.

Universal Detection Technology (UNDT) is up more than 200% on record-breaking volume today. Why? The company was awarded a patent on its anthrax detection system.

We congratulate and applaud the company, but we’re not sure the upside explosion makes sense, As with most patents, real revenue is probably years down the road. And even if it’s an immediate revenue generator, what’s the actually potential in dollars?

Still, bio-detection as an industry has been growing of late despite the lack of a tangible land potential threat on that front.

If we could get some plausible numbers form the company, we could be a lot more interested. Until then, we’re going to assume this rally will be a one-day penny stock wonder like the last several have been.

Medefile International, Inc. (MDFI) is on track to close flat for the day, but volume was huge…. 123 million shares versus the average of about 10 million per day.

The odd part? No news. There’s been none in months. Yet, clearly something is generating some excitement. Or, maybe it’s just a very good pumping effort. We vote the latter.

The company is legitimate - just a very weak one. The float’s pretty small too… small enough that it can be controlled by a small number of traders, which means we’re not interested.

SpongeTech Delivery Systems, Inc. (SPNG) is a busy bee today, but on the selling side of the fence. The stock’s down 6% today on almost 100 million shares worth of volume… more than average.

There’s nothing really wrong with the stock - SPNG just had a nice run from $0.078 to $0.18, and some profit-taking was in order. That said, make a note that 18 cents has now been a micro ceiling twice now.

On the sunny side of the street, the company once again paid lip service towards the reduction of its outstanding and authorized shares. Follow-through on those plans has been a little more difficult. In all fairness, the company has grown the per-share top line and bottom line, even with heavy dilution.

Stratos Renewables Corporation (SRNW) didn’t fall off our radar after we initiated coverage of it last year. There just wasn’t much to talk about while the company’s progress was put on hold due to a lousy economy. Let’s put it back into play today.

Today’s 133% gain from SRNW is certainly going to get somebody’s attention. The penny stock’s moved from $0.012 to $0.028, on no news. Don’t get too excited yet though… the nature of penny stocks is that a small move can be huge, in percentage terms.

Still, Stratos’ trade volume surged yesterday, and is pretty solid today as well. Why? Great question… very suspicious, but not necessarily in a bad way. On the other hand, it could have been tax-loss dumping.

We’ll monitor it either way - stay tuned.

That’s it for today, but be sure to check back early and often. The Micro Cap market’s switch has been turned back ‘on’ again, and we’re finding lots of great ideas now.

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A rising tide may lift all boats, but it doesn’t left them all equally. We’ve seen a surprisingly wide disparity between the market’s best (financials) and worst (telecom) sector since March’s low. While we would have expected sector rotation to kick in by this point replace the old winners with the old laggards - and vice versa - we’ve really not seen that yet.

On the other hand, the market’s been flat over the last few weeks, and none of those prior leaders have continued to mow a path higher. Point being, just because the financial stocks are still the top dogs for the timeframe doesn’t mean they have any major rewards left to give at this point. Likewise, just because telecom is the big loser doesn’t mean it’s going to be at the bottom of the barrel forever.

With that in mind, our suggestion for getting the most out of this chart is not simply to understand how the sectors rank over the last four months. We encourage you to also look at the shape of each sector’s percentage performance line. Are any heating up or cooling off that weren’t before?

We’ll post an updated version of this chart as son as it’s needed.

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If you want to know what other penny stock traders were buying yesterday, here you go. We’ve got a select list of stocks that saw the most net buying (by volume and trade count) on Monday. That strong interest may be if some use to you, in that these penny stocks are attracting buyers for a reason. Watch out though - the reason may be a bad one.

Anyway, the most popular penny stocks from yesterday were United Microelectronics Corporation (UMC), Huntington Bancshares Inc. (HBAN), LEVEL Vision Electronics Ltd. (LVLV), and SpongeTech Delivery Systems, Inc. (SPNG).

Here’s a closer look at each.

United Microelectronics Corporation (UMC)

UMC opened and closed in the red yesterday, but we saw a huge intra-day rebound after the selling retested the 20 day moving average as a support level. We saw some follow-through today, but United Microelectronics shares are back where they started the session.

There was no news behind the gain yesterday for this penny stock, but the uptrend that started back on June 19th has been supported by encouraging data from the company. Namely, we recently learned June’s sales were solid, and that the company expects to see a profit for Q2.

Just FYI, the benchmark company in the industry is Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). It was the only profitable company in the foundry group during Q1, but Q2 is shaping up to be better for many of them. In fact, it may have been TSMC’s expansion news from June 17th that jump-started UMC’s rally.

Bottom line: This penny stock could really be worth adding as a long-term position. It’s worth a look anyway.

Huntington Bancshares Inc. (HBAN)

Yep, weighing in at under $5.00, Huntington is classified as a penny stock. It’s also been a volatile one too; it’s back in the red today, and back where it was priced in early May… though it’s been all over the map in the meantime.

There was no prompt for the move, other than the normal speculations about the stock being undervalued. The rumor is that the company is going to blow away estimates when they report their Q2 results. The market’s looking for a loss of 18 cents. (The market doesn’t expect to see a profit through 2010 either.)

One interesting tidbit about Huntington… it was one of the stocks that saw the very biggest increases in short interest during the last two weeks of June. It’s still only stands at around 8%, which is more than a little, but less than a lot. It could be a factor at some point though.

Bottom line: we see more upside with HBAN than downside.

LEVEL Vision Electronics Ltd. (LVLV)

Trading’s pretty thin for this pink-sheeter, but we saw a handful of heavy volume buy trades pass through. It’s up again quite a bit today too. Yet again, there’s no news.

There’s not a lot of interest in this stock either, so we almost dismissed it. A recent headline caught our eye though…. “LEVEL Receives Its First Advance of the $4.7M Financing From Cunningham-Adams Small Cap Fund II”.

So what? Funds don’t often go around providing cash as working capital. Banks do it, probably because banks don’t often know any better. For a fund to do it though suggests the LEVEL Vision enterprise has passed a few tests from an investor’s perspective.

Oh, we’ve seen the flipside of these deals before too. Odds are high that the financing is almost toxic to both companies. If LEVE: can walk the thin line though, this may be the beginning of a beautiful move. The company is certainly doing its part on the PR front.

Bottom line: It could be fun to play with, but it’s not what we’d call a core holding.

SpongeTech Delivery Systems, Inc. (SPNG)

Just to explain how some of these stocks make the list despite a move lower…. the screener looks at intra-day activity. And, despite the net loss, there were a couple of high volume, large block buy trades that went through, pushing SpongeTech shares higher for that moment.’ (The same goes for LEVEL Vision.)

It’s also worth noting the sellers took charge right out of the gate this morning, punishing whoever it was that was buying at any point yesterday.

Our take? Support at 10 cents has been broken, so this penny stock is in a downtrend until further notice. The next nearest likely support level is 3.8 cents.

Bottom line: This is a trader’s stock…lots of up, lots of down, and SPNG responds well to technical analysis.

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Since we didn’t get a chance to publish a newsletter due to the way the July 4th holiday fell this year, we want to post a blog entry regarding some of the more pressing changes for our watchlist stock’s charts. We’ve only got four for now… Flow International Corp. (FLOW), Aristotle Corp. (ARTL), Solar Power, Inc. (SOPW.OB), and New Energy Technologies, Inc. (NENE.OB).

Flow International Corp. (FLOW)

When we last took a look at Flow International, we decided the chart was still bullish, but we knew there’d be plenty of volatility in store. Now we’re not so sure about the former.

Since the early June peak we’ve seen nothing but lower highs. On the other hand, we’ve not really seen FLOW make lower lows; we’ve just seen horizontal support around $2.19.

Given the shape and direction of this chart, as of right now we have to take a bearish view of Flow International again. That’s not a bearish call to action (short trade) mind you….  only a breakdown in that support line would prompt that. (And even then, this chart has been more prone to reverse than to follow-through.)

Aristotle Corp. (ARTL)

Our first look at Aristotle was a bullish one based on the rising support and resistance lines we’ve seen since April. Our more recent look, however, pointed out how the lower edge of that zone had broken down… a bearish clue. Since then, it’s become relatively clear the bulls have drawn a horizontal line in the sand at $4.74.

So, we’re really neither bearish nor bullish here right now. There’s a chance ARTL could make its way back into the rising bullish zone (though that’s a longshot). On the flipside, a tumble under $4.74 could spark a wave of significant selling. Until one of those two things happens, stand by.

Solar Power, Inc. (SOPW.OB)

We’ve always been impressed by the strength here, but when Solar Power shares surged to overbought levels in early June, we knew SOPW was likely to get reeled in. And sure enough, that’s what happened a few days later.

Fortunately (for the bulls) the 20 day moving average line stepped in as support and halted the pullback. Unfortunately for the bulls, the stock has also found a ceiling - at $1.00.

We still like the upside potential here, but the resistance level at $1.00 needs to be knocked down before we get too excited.

New Energy Technologies, Inc. (NENE.OB)

Much like Solar Power Inc., we knew NENE shares were overbought when we first became interested; waiting for a pullback to relieve the problem was wise.

Well, we got the dip… all the way back to a major support line. What we don’t have yet is the rebound to go along with it.

As such, this chart has just about as much bearish potential as it does bullish potential. Just watch the support line at 57 cents (and rising), as that will tell you if we’re on course for a breakdown. A move above 66 cents would confirm the overall uptrend is still intact.

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