..when my readers email me with ideas on stocks to blog! I got an emal from a subscriber saying that I needed to check out COTE.  I get emails all the time talking about the “stock of the day”.  Some are company personnel or their Investment Bankers wanting me to plug their company.  I have to be careful with that.  But, I liked what I saw with COTE, so here goes.

This stock looks to be a little past its “sell-by” date.  It has had a strong run up this week, but is looking overheated.  Two key indicators (RSI and Stcchastics) are showing that the stock is overbought.  That means to me that it may correct in the next few days.  Profits have to be taken at some time.  I liked what I saw, but am concerned just how long this run will last.  The stock is up another 10% in trading today, but be very careful.

Now, let’s talk about COTE.  Coates International, Ltd. is involved in the development and production of Coates spherical rotary valve system (CSRV System) for use in various piston-driven internal combustion engines.  The company is claiming that they have created the internal combustion engine of the future.  It has significant benefits compared to the engines of today:

• Increased Engine Efficiency
• Lower Emissions
• Reduced Lubrication Requirements
• Cheaper to Manufacture
• Adaptable to Multiple Fuel Types

The company has had some revenues (from licensing the technology and sale of their HQ building in 2008), but they haven’t achieved any steady income.  Like  all R & D companies they are hurting for cash, but it doesn’t look terminal.  I, for one, am rooting for them.  They appear to be building some nice momentum from reading news on the company (remember the old adage in this business:  believe little of what you read about pennny stocks).  COTE makes noise about being a manufacturer, but the near-term revenue is going to come from licensing.  That revenue could be substantial if certain government or corporate influencers get behind their technology.  That is a pretty big IF.

The chart will back up what I had said earlier.  The stock might be due for a correction in the near future.  Any kind of reasonable “support” for the stock is around the 50 cent mark….so, it could fall a long way!

I would keep it on your radar, though.  If it corrects that might be a good time to buy given what I see from this company.