To buy or not to buy WordLogic

BUY: J. David Stewart, Analyst and Publisher, of the The Stewart Report (see this post) - A 25-year veteran of Wall Street, J. David Stewart is also a private professional investor, stock analyst and publisher of The Stewart Report (now in its 15th year of continuous publication). His acumen as an analyst specializing in small and micro-cap securities has earned him wide media attention, including feature stories in: Money, Fortune and Entrepreneur. He's also been quoted in The Washington Post, The Financial Post, The New York Times, The Financial Digest, Investor's Business Daily, The Dick Davis Digest and Barron's. The impact of his thinking is regularly reported in wire service dispatches by CBS Market Watch, Reuters, Bloomberg and Dow Jones News Service, and he is a frequent guest on national radio and television shows, including CNN. WordLogic Corporation's chart is one of the strongest I've seen in months. Admittedly, the recent market environment has resulted in a lot of very sickly looking stock charts, so I've been seeing some pretty bad stuff - but this picture would look outstanding even if I had nothing but bull-market winners to compare it to. After giving up roughly 90 percent of its value during the broad swoon that befell the entire market during 2008, WordLogic started bucking the general trend in early November and spent the next two months building a solid base from which to launch a New Year's rally - one that easily penetrated the short- (20-day), intermediate- (40-day) and long-term (180-day) moving averages, as well as a declining trend line that had represented minor upside resistance for more than six months. Since the beginning of the year, the stock has gained more than 200 percent, culminating on January 20 with a gap opening and subsequent move that tested the major resistance around 85 cents. Given the strong recent rally, I'd look for the stock to fail in this first attempt to break through that barrier, retrace to fill the gap on some short-term profit taking, then launch a rebound that will not only crack the major resistance but carry all the way to the $1.05-$1.10 level. If that takes some time, new resistance could build beyond that point - but if the stock gets there quickly, a further move carrying back to the 52-week high should follow close behind. The former Managing Editor of The Los Angeles Times Syndicate, Larry D. Spears has served as editor for America's foremost political and economic columnists, including Pulitzer Prize-winner Art Buchwald. As Editor of the Hume MoneyLetter, he polished the works of financial luminaries ranging from J. David Stewart to Wall Street Week host Louis Rukeyser and former U.S. Treasury Secretary William Simon. He also authored and edited "The SuperInvestor Files" for Hume Publishing and created the "100 Steps to Wealth" home-study course for Money Magazine. Currently, he is Editor-in-Chief for The Stewart Report and continues to specialize in the use of technical analysis and options trading, having authored four books on those subjects.