Telestone Technology: Attractive Small-cap Wireless Play (TST)

| About: Telestone Technologies (TSTC)

On February 28, 2006, Telestone Technologies Corp. (NASDAQ:TST), a leading provider of wireless communication coverage solutions primarily in China, announced the successful completion of a comprehensive 3G wireless coverage test for China Mobile's Guizhou Province Division using Telestone's new 3G wireless coverage platform system. The test specifications were outlined and supervised by China Mobile and Huawei Corporation technicians who monitored and measured the overall quality and stability of the signal coverage of the Telestone system. The trial testing was conducted at a frequency of 1800 MHz for 3G using Telestone's new 3G-coverage platform system.

Investors had been anticipating this news, for in the wake of the Company’s news release, the price of the stock rose to at a seven-month high, closing at $5.20.

Technically, the stock has come under short-selling pressure, for with average daily trading volume of only 21,100 shares, more than 400,000 shares were sold short in the last thirty-days. The stock retraced, successfully testing the $4.12 level—its 200-day moving average.

We recommend that readers—new and old—revisit our initial BUY recommendation of Telestone Tech., “The Peoples Investment for 3G Wireless in China,