It appears that investors have renewed confidence in New Energy Systems Group (AMEX: NEWN) as the 5-day volume average has more than doubled the 2-month volume average. Speaking of volume, there was a buyback update announced yesterday that shed some light on how the company execs perceive their business – NEWN’s senior management team has purchased approximately $300,000 of company stock to date with personal funds!

NEWN is currently more than 70% off its 6-month high and is still trading in the low $2 range. If we were to buy in right now, we could have a much lower average than the execs too! The CEO bought $200k at $3.45 and the CFO bought $100k at $3.39. Now that NEWN has developed two support lines below $2.00, it is time to see if it can break through resistance at $2.36 for a reversal trend.

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The Chart Shows

• NEWN is bouncing hard off its $1.83 support line and trying to break resistance at $2.36 where the 20 day moving average is also conveniently travelling. There needs to be a break above both to continue for a possible reversal trend!
• The RSI is shooting up out of oversold territory directly into the buy zone at just above 46!
• The MACD had a golden cross yesterday meaning that there could be a reversal trend in the very near future.
• The ADX also crossed, which shows a strong positive directional trend.

The Bottom Line

NEWN is cheap here, and with the senior management team’s personal investments in the company, new volume that dwarfs volume in the past three months, and perfect indicators that suggest reversal, this stock looks like a great buy for mid to long-term! Remember that there needs to be a break at resistance/20day MA for a reversal confirmation.

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Good Luck,

Ian Decker

Disclosure: No position

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