Penny stocks are regarded as risky expense instruments for investors simply because from the numerous disadvantages connected with them. Illiquidity is generally cited as a single from the more well-liked reasons for this risk as shares of penny stocks do not generally alter hands because of towards the lack of market assistance and so marketing them may not be that easy for investors. More Penny Stock Guide
Stock traders have just finally started to get interested in buying and selling penny stocks. These stocks will never get the attention that the blue chip companies get, but they shouldn’t be treated just as the “poor man’s” investment. This is where most people go wrong when they are looking at small cap stocks. They think that trading them involves different rules that don’t pertain to the “real stocks”. more penny stocks
Typically when you think of trading stocks, the major stock exchanges may come to mind like the New York Stock Exchange (NYSE), the National Association of Securities Dealers Automated Quotations (NASDAQ), and the American Stock Exchange (AMEX). A Penny stock is a low priced security for a very small company with a market capitalization of under $500 million and usually trade in very low volumes. Penny stocks also trade on other “other the counter” exchanges like the OTCBB and Pink Sheets. More Penny Stocks Pros and Cons
By Louis Navellier
Contributor to TheStreet
09/08/10 10:56 AM EDT
By Louis Navellier of InvestorPlace
Penny stocks can be difficult investments for many retail investors, with shares trading for only a few cents always listed on the pink sheets and frequently involving high fees and high risk. But the next best thing is to go for low-priced investments that barely qualify for the major exchanges, skirting the $1 share price limit.
Right now, a number of decent small-cap financial companies are right on the line with shares at around a buck apiece. My Portfolio Grader analysis tool tells me that several of these financial stocks are seeing strong quantitative buying pressure, what I call “quant.” That means buyers are dramatically outpacing sellers even in this volatile market — a great sign for these stocks.
To help you get into these penny stock picks before they take off, here’s my list of six cheap financial investments to buy now. Here are the 6 Penny Stocks
This is just a quick update on what kind of penny stock lists to create. You wouldn’t believe all the e-mails I receive with questions about watchlists and news lists. Why or why penny stock companies make or don’t make my lists.
As you trade penny stocks keep a list of penny stocks that you will not buy no matter if the volume is strong or the news is great. I have a rather extensive list myself. This list consist only of stocks who tend to reverse split and then change their symbol. These are usually the same ones being profiled or pumped but not always.
You can have penny stock lists based on charts and break them into sections, strong runners, bottom bouncers etc….. Try to move stocks in and out daily as the runs or bounces fail if you can’t double check the charts before entering.
I also keep a penny stock news list that I scrap daily. If I like the news I check the chart, if the chart is ok its on my watch list.
While trading I watch for volume and positive movement on any of these stocks. Knowing that I already like the charting set up, I can enter quickly and begin re-evaluating the chart for exits.
Hope this helps those who have trouble creating penny stock lists, if there are more questions just e-mail me or add a comment at the bottom of the article. I’ll try and answer them or create a new blog if I find everyones interest into a specific area.
When compiling your penny stock watch list, you only have two basic requirements to look out for. First, the penny stock must have sufficient trading volume of at least 50,000 shares since anything less than that can be a sign of too little interest on the stock under consideration. But you must also consider the factor of insider trading wherein just a few people are moving the penny stocks to make it seem that it has a high trading volume.
Second, the penny shares in your list must have a high degree of volatility. Basically, you are looking for penny stocks where traders can purchase the stocks at or near the support levels on one hand as well as sell at or near the resistance levels on the other hand. Look at the price level, which should allow any sensible penny stock trader to cash out and cash in on the profits.
Of course, these two basic requirements for inclusion in the penny share watch are just that - basic. You still have to consider other factors in the choosing especially as penny shares are high-risks albeit high-rewards investments of sorts. Also, we understand if it will take time, effort and, of course, money before your watch list for penny stock becomes reliable and profitable.
But before you can even compile your watch list, we recommend thinking things over in regard to your involvement as a penny share trader or investor. We cannot overemphasize the fact that these shares are not for every trader or investor, not even the savviest one in the bunch for many reasons.
For one thing, these shares are highly volatile securities that can rise and fall in mere seconds. Since it is not as highly regulated as the stocks of the blue chip companies, the risks for losses are higher. For another thing, effective monitoring of your stock holdings requires the proper mindset, attitude and approach, not to mention the time and effort on research necessary. Even your penny stock watch list today may not be applicable two days from now and, thus, it will require almost constant monitoring. This is considered by some as day trading penny socks.
But if you have the time to monitor, evaluate and analyze the penny shares on an almost daily basis, then becoming a penny share investor or trader is the right path for your wealth-building activities. You have to possess a personal computer with an Internet access so as to be able to check the stock prices at a moment’s notice, usually between 8 to 12 times daily depending on your stock holdings.
Aside from the prices, you also have to monitor the bid and ask lots, the market movements and the industry conditions, to name a few other factors. With such a fast-changing environment, it is no surprise that the watch list for penny shares changes fast, too.
The rewards for all your time, effort and money, fortunately, more than outweigh the costs. With the right stocks on your penny share watch list, you can proceed to buy and sell the stocks to your advantage - increasing your wealth a few thousand dollars at a time, that is. You might even be able to afford setting up your own micro-cap company and let others trade or invest in the penny stocks.
Written by: Best Penny Stocks
http://www.bestpennystocks.net
AGAIN! These stocks you put on your watch list, and when they begin to pick up in volume and move positive is when you buy. Don’t just buy the list now.
BFRE .37 ethanol. Has flatlined for a while just under .40 positive divergence happening, ready to pop.
BMNMD .85 double bottom.
MBCI .51 triple bottom and nice candle look for pop soon.
SNKTY .91 setting up nicely.
OPCO .71 staircase straight up.
SUWN .38 I thought this was done thursday but came back strong friday. I’m expecting a rest but we’ll see.
Just 6 penny stocks. Easy to keep track of them as we watch the news and the market as a whole.
BFAR made a few more cents but stalled like we figured.
NTUR holding that bottom, MACD ready to cross positive. Keep on watch.
IPMN continued that strong run but then topped out. wait for a pullback.
ITEX run died where we alerted.
STTN still looks weird and holding its own with a large drop in RSI
AIDO didn’t really move, its holding just under .03 watch for the 50 dma to push it up.
DSHL ran up over 100% but pulled back under the MA’s moves very nicely!!
NCOC popped a little off that bottom. pulling back, may double bottom.
Again, DO NOT BUY these stocks are on a watch list, if you see positive volume triggered then jump in, these are poised for a run but may not be quite ready.
-look at our results list for last week, there are a couple stocks still on watch from then.
BFAR went from .50 to .94 Friday. Probably the end of the run as we’re at heavy resistance but watch it anyways.
NCEN .42 near a bottom. Setting up positive divergence.
NTUR .80 low floater so chart is weird but likes to pop from lows.
IPMN .28 up about 200% in a few days. Petroleum play with room to run.
ITEX resting at .85 has room to run last 2 candles signal pullback.
STTN .60 tough chart to read but has been hot.
AIDO .03 low float. Weak Cup and Handle forming, ma’s making a bullish cross.
DSHL might have found its bottom as a subpenny Friday. Back up over .01 by end of day and closed at high.
NCOC looks like the bottom was hit. .60 now.
Good Trading!
If your new here, don’t forget last weeks results, some of them are continuing on our watch list. Last weeks Penny Stocks List
This Weeks List of Bottom Picks:
AMNP .30 pos divergence
PTOS .275 weird one, never goes up but….low floater.
SNDZ .50 Careful this one just dropped down from 2.00
This Weeks Runners
APNT-.35 Probably bad, currently setting up neg divergence and a bad candle friday but…its close.
SCLX .70 was a beast friday for 30% closed at HOD an made a new 52 wk high
TBIO.83 let it rest, rocked all week, Friday was low volume red. look for short pullback and entry.
Those are usually are longer lists but we can only call them as we see them.
STCA .22 right on bot ma’s coming down hard. look for a bounce from here. wait for positive volume, yes we see how scary it looks.
Remember, these are all chart thoughts, no insight into news or filings with no company contact.
Good Trading!
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