The markets opened this morning with follow through buying strength as the NDX gapped up to 2570 and is currently backing and filling those gains from yesterday's close as I type. Like we mentioned yesterday, the 2577 - 2613 on the NDX was going to likely be a short-term resistance level the market was going to have to deal with if we're going to move higher. Again, the QQQ call options we suggested late last week are well in the money so let's not get married to those. You have to have made at least 30% on those options in a few short days so take that money off the table and let's see just how much conviction there is for this market to want to go higher. Advertisement A private website Wall Street doesn't want anyone OVER AGE 55 logging onto This private Internet site could help you collect as much as $653 per week in extra retirement income... Without touching regular investments... And without going through brokers and money managers ever again. Click here to learn more... Advertisement I suspect if we've truly found a bottom, there should be at least some whip saw volatility before we inevitably move higher, so we've still got a lot of work to do. However, what we've seen so far with this week's move is very encouraging. We mentioned earlier in the week that bottom formations are generally started with furious snapback rallies and the three day rally thus far has provided us with just that. I've included a daily chart of the NDX showing you what I'm referring to here. So, for all intents and purposes we'll say the first third of the work has been done for Monday's low to represent a bottom we can work with for at least a good while. The other two thirds of work remains to be seen. We'll need to break above the 2613 level on the NDX in convincing fashion and take a look from there. I suspect we'll see a pullback at some point here soon. The strength and volume of the support is going to tell us a lot. For now, let's not get long short-term options until we get a favorable entry to work with again. Looks like the market is begging Bernanke to come save the day again should the economy weaken. What a nice backstop to have! Don't you wish you had someone to bail you out when you make bad decisions? Hey I lost money on this stock, can you please give me my money back? Must be nice. SCLN Provides SCN Members with Gains in Short Order Our most recent featured stock addition, SCLN, popped nicely over the last two days providing SCN Members with roughly 10% gains in three short days but that might just be the beginning. We mentioned in Tuesday's edition that a break above $6.94 could send shares of SCLN to new levels. This morning, the stock reached $6.90 before stalling, so let's see if it can break above $7.00 and start a new leg up. If you haven't gotten in already, it's not as attractive 10% higher now than it was on Tuesday when we suggested it, so if you're considering getting in here, it's up to you. I'm pretty particular about my entry points and that usually proves to be a good thing but I'll admit there have been times where I wasn't willing to give up that 10% and it ended up being nothing compared to what I could have made. Guess it goes both ways since hindsight is always 20/20. What's interesting about the decent move the stock has made over the last couple of days is it has been on no news. I tend to like technical moves on no news since it often proves out to be a prelude to some sort of significant news event. I'm not suggesting at all that SCLN has news in the wings, it could very well be a result of their recent share buyback announcement. Either way, we'll take it. Keep a close on a break above $6.94. What happens there will be the test. As always, use protective stops, now that you're in the money, don't let a gain turn into a loss. Be prudent. CALL Gets the CALL from Short Sellers magicJack VocalTec Ltd. (CALL), a cloud communications leader that invented voice over IP (VoIP), is a stock that has been dear to our heart providing SCN Members who were paying attention with 100% gains when we initiated coverage on the stock earlier this year around $14 per share. Shares of CALL over the next few months ran as high as $28 per share before finally stalling. We again suggested CALL as a nice options play a few months back and the stock again made a nice move providing options purchasers with some pretty nice gains as the stock rallied to a short-term high of over $26 per share before stumbling into some controversy surrounding its share buyback program, which was reported by WSJ as using an unconventional equity-options play in Q1, a strategy largely discredited after the dot-com boom. This is the kind of stuff short sellers live for, but it's a dangerous game for them when they've missed most of the move to the downside, which is where shares of CALL are now looking extremely attractive once again. CALL has managed to make the Reg SHO Threshold List day after day recently, which in its simplest form is a list of stocks that are being heavily shorted. For educational purposes, a "threshold security" is any equity security of any issuer that is registered under Section 12 of the Exchange Act, or that is required to file reports under Section 15(d) of the Exchange Act (commonly referred to as reporting securities), where, for five consecutive settlement days: There are aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security; the level of fails is equal to at least one-half of one percent of the issuer's total shares outstanding; and the security is included on a list published by a self-regulatory organization (SRO). A security ceases to be a threshold security if it does not exceed the specified level of fails for five consecutive settlement days. Bottom line? Shares of CALL have been heavily shorted up to now, but I suspect that's going to come to an end pretty soon and if the shorts haven't covered yet, I would imagine that alone should provide a nice tradable rally. Right or wrong, the value of CALL still appears to be fully intact and in our opinion is grossly undervalued at current levels. With a market cap of just over $300M, shares of CALL are currently trading with a forward P/E of roughly 8.5. From an industry perspective, Verizon and AT&T are trading at roughly twice that. And, those are large caps. The reason that matters so much is Verizon and AT&T have so much of the existing market share already that in order to increase their share price and lower their P/E's, they're going to have to move mountains. With a small cap like CALL trading at roughly half the value of its big brethren, this poses tremendous value and a lot more room for future growth since there is so much more market share for the Company to capture. However, I think the real value in CALL presents itself in a bit of not so obvious way. No matter what, nobody can deny that CALL is one of the biggest VOIP players in the space and let's remember, EBAY bought Skype back in '05 for $2.6B. Additionally, with magicJack's hugely successful marketing campaign selling over 9M magicJacks to date, their database of customers alone is likely worth well over what the stock is trading at today. If that's not enough, the Company came out Monday and announced that Q2 2012 analyst estimates of net income and earnings per share ("EPS") have already been surpassed during just the first two months of the quarter. June results will just be additive and total EPS results for the quarter may surpass $0.43 per share of operating income. So as you can see, the short sellers argument isn't half as strong as the bullish argument in our opinion. Sometimes the value of a stock can stare investors in the face so easily that it almost looks too obvious, but I think in the case of CALL, it is what it is… grossly undervalued at current levels. I've included a daily chart of CALL here for your review. It appears the bulls are stepping back in as the stock has made attempts to put in a bottom around $13.22. If you decide to jump in, that $13.22 level provides a decent suggested stop loss level. Currently as I type, shares of CALL are trading at $14.62 thus providing an excellent risk/reward opportunity from here. Time will tell, but we just couldn't ignore the potential opportunity. We're going to once again make CALL a featured stock on the site, so if you want to read what other SCN Contributors and Members have to say about CALL, go here: http://www.smallcapnetwork.com/VocalTec-Communications-Ltd/s/quote/p/s/CALL/. Let's see if lightning can strike thrice for us. Yes, not twice, thrice.