Here's how it usually goes.
1) Discovery of penny stock by few savvy investors.
2) DD is disseminated as more people find out about penny stock.
3) Stock starts to move based on company fundamentals i.e. alliances inked, orders received, future expectations are raised, etc.
4) Good period of volatility, then forming base.
5) Stars align and it blasts off, at which time the brothers, sisters, uncles, aunts, parents, friends, etc. who DIDN'T get in when told to back in the sub-$1.00 days finally pull the trigger.
6) Momentum builds and builds. This is when the classic MO traders enter catching the wave up and up.
7) Now at HISTORICALLY lofty heights, the MO traders get out, maybe shorting now; the nervous longs sell to lock profits, and what we have is some serious down drafting all helped by the weight of the previous ascent in too short a period of time.
8) REPEAT steps 4-7 as many times as the market will allow.
Remember folks, we are all part of this great game. You choose to act or react. Think about what you want out of a particular stock and stick with it, whether for a quick trade or justing accumlating. It's the "change my mind every minute" investor that scares me! ;~)
Good luck,
Buzz |
