Out With That, In With This (PZOO, ARTX)

For those traders who were lucky and smart enough to be in an Arotech Corporation (NASDAQ:ARTX) before today, then congratulations - you're up at least 38% on your position. Now it's time to get out. Conversely, if you're looking for a new name to get into (or perhaps looking for a place to park your ARTX proceeds), then you may want to consider Pazoo Inc. (OTCBB:PZOO)... a tiny online retailer of health and fitness goods. PZOO has dropped several tell-tale hints that more upside is on the way.

Just to quell the inevitable "colorful disagreements", this isn't a long-term judgment call on Arotech Corporation. The company is a fine company, and has an encouraging future. Likewise, this isn't necessarily a long-term bullish stance on Pazoo Inc. The company's got a compelling niche concept, but it's a startup, and as such the odds are against it. This take is simply an acknowledgement that both PZOO and ARTX are trading instruments, and are fully capable of taking on a life of their own... a life that may or may not reflect their underlying corporate value. If one can take advantage of that short-term mis-pricing or hype-driven trend, why not do so?

As for ARTX, in simplest terms, the stock's overbought thanks to today's massive (though possibly deserved) jump. Between the gap and the volume surge, there's not likely to be much - if any - gas left in the tank.

It's the volume that's more problematic than the gap, truth be told. Volume spikes like this one also tend to accompany one-hit-wonder days. Anybody who wanted to get into Arotech has likely done so today, out of fear that they miss out on more upside. Ironically, with all the would-be buyers having rushed in, there's not likely to be any more interested buyers willing to pay this lofty price. If anything, there are now more sellers at this level... folks who are tempted to take profits (and folks who will become more tempted to do so if ARTX continues to taper). Being proactive and walking away now on your terms may be the prudent move to make, at least until Arotech Corporation find a firm bottom.

So what's the deal with PZOO? Had it not been for today's uptick - which reversed a nasty pullback from multi-week highs hit last week, it may not even be worth mentioning. But, today's modest (so far) bullishness puts the final touches on a rally effort that's been developing since May. Said another way, the bears had a perfect opportunity to unwind all the work that the Pazoo Inc. bulls had done up until last week. Today's bullish nudge, however, offers just enough of a glimmer of hope to say the uptrend is underway again.

As was already noted, PZOO isn't necessarily a name you want to get married to. While it's only a $3.6 million organization, sales are still nil, and the company is still very much in its development stage. That doesn't mean there's not a trading opportunity packed into Pazoo's shares, however. This hype-driven rally being made by people who like the idea of getting in at the ground floor could last for some time. The 'story' is just now starting to resonate within the market's trading circles.

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