Given the poor performance of the market last week, we were happy to see that Bio-Matrix Scientific Group (BMSN) did not violate its trendline and remains above its 13, 50 and 200 day moving averages. We look for continued consolidation as it works off its recent overbought condition.

While we saw a nice 11% intraday move in last week’s pick - China Architectural Engineering Inc (RCH).  It traded as high as $7.15 during the week, though it has not yet reached our price target of $7.85. As higher margin requirements have gone into effect for many of the agricultural futures markets, these shares look especially attractive for those who desire alternative ways to speculate in this sector.

Market Wisdom

Since the start of 2008, the Dow Jones Industrial Average is down 7.9%, the S&P 500 has shed 10.4% and the tech laden NASDAQ is down a sharp 14.7%. As a new month begins, investors will be focusing on first –quarter earnings season and possible profit warnings from companies impacted by a slowing economy and the credit crisis. We remind investors that while the economic downturn worsens, the financial markets are leading indicators that usually bottom six to nine months before the economy. With that said, we are recommending to our readers to pay close attention to individual stocks that don’t go down (or even go up) in the face of bad news.  It’s been said that these are the stocks that are at or near a bottom---and will emerge as the new leaders when the market turns around. The logic is simple. If the bears can’t drive prices down with bad news, everyone who would have sold has already sold. These stocks are often poised for explosive upside action with the first piece of good news (or even bad news that wasn’t as bad as expected.) If we see market sell-off the mornings of the ISM and jobs report later this week, but stage impressive reversals that lead to positive closes by the end of the day, this too will bode very well for the market moving forward.

Debt Resolve Inc   (AMEX: DRV)   Current price: $2.25

Debt Resolve Inc. is a New York based development stage company that provides an internet-based bidding system for the collection of past due consumer debt. It main product offering is the “DebtResolve” system, which enables its creditor clients to settle and collect defaulted consumer debts online. The Company has seen 1620% quarterly revenue growth (year over year) and is poised to continue to benefit from hard economic times and future debt-service delinquencies, as the unwinding of the subprime mess continues and the number of unemployed goes up. With a beta of -0.26, the stock has historically gone up in down markets. In other words, a decrease in the S&P 500 of 1% has resulted in an increase of .26% in Debt Resolves Inc stock price. Investors may want to consider adding negative beta stocks to their overall portfolio in turbulent times like we are experiencing today. This makes it particularly attractive as a hedge against further market weakness as we enter the seasonally weakest time of the year for stocks from May to October.

Recent Developments: A whopping 1620% increase in quarterly revenue growth in an economy that appears to be deteriorating.

Technicals:   After reaching an intraday low of $.56 on January 22nd, 2008, the stock has made an impressive move to an intraday high of $2.56 on expanding volume on up days, and contracting volume on down days. It recently broke back above its 200 day moving average where it is currently trading. The stock appears to have worked-off its recent overbought condition and is poised to move higher. The recent pullback of the stochastics from overbought levels and the trendline break of the MACD differential (see chart) suggest potentially further upside.

Consideration:  Consider accumulating on any weakness while maintaining an upside price objective at $3.54 and a stop-loss at $1.60.

XSUNX Inc.  (OTCBB: XSNX)  Current Price: .44  

XSUNX Inc.  is an eight year old, California-based alternative energy and clean technology company that develops thin film photovoltaic amorphous silicon solar manufacturing  processes to produce TFPV solar modules. The company is part of the solar energy technology sector which has been generating $10 billion in annualized revenues and has been growing 35-40% annually as a result of significant investments in new production facilities and technologies around the world. Many experts believe the photovoltaic (PV) market will reach $25 billion by 2011.  XSUNX Inc. stands to benefit greatly as thin film technology such as their amorphous technology offers the lowest cost per watt at the module level. As a result, thin film’s share of the overall solar PV market may increase from around 5% currently to as much as 20% in five years and deployment of the film technologies will grow much faster than the overall PV market.

Recent Developments:  The Company has recently been engaged in a detailed search in Oregon for the most appropriate manufacturing facility and is expected to make an announcement in late March or early April.

Technicals:  After successfully re-testing its August 2007 low, the stock broke to the upside in late December 2007 with a move from .285 to .74 in a little over two weeks. After spending several weeks retracing back to the original breakout point of .33 (but on considerably lighter volume), the stock has once again  broken its intermediate-term downtrend and appears to be making another move towards the .74 resistance level on increasing, but not exhaustive volume. As confirming indicators, the stock recently crossed back above its 50 and 200 day moving averages, the MACD recently made a bullish crossover, and both stochastics and RSI are in strong, but not exhaustive, uptrends.

Consideration: Consider accumulating the stock on any weakness with an upside price target of .74 and a stop-loss at .25.