NOVEMBER 2009

Finding Top Penny Stocks

One of the best ways to find top penny stocks is to review their trading charts to see if there are any noticeable trading patterns.  If a stock has a regular history of spiking in price shortly before the quarterly report, you can time your buying to coincide with the next anticipated spike, and sell before the earnings report is issued.  Learning to read a stock’s charts is the easiest way to determine if it belongs in your top penny stocks list.

Look to companies with trustworthy experienced management in hot sectors for other top penny stocks.  The penny stock market is unfortunately rife with sham companies run by dishonest stock promoters who do nothing except print and hype their stock.  They can often manipulate their stock price, but because there is no real company behind their claims, the spike in price seldom lasts more than a single ...
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Penny Stocks - Turn Your Pennies Into Dollars

We've all heard about the investor how bragged about his 100% or 1000% return on a stock or about the guy who made it rich by investing in small caps, undiscovered stocks that made it big. In theory, it seems to be too easy. Invest in a couple of penny stocks, then sell them when they move up. Unfortunately, it is too easy. Too easy to lose money unless you know what to look for.

First, lets have a look at what types of companies trade on the OTC BB or Pink Sheets.

Stocks that no longer trade over $1 on the Nasdaq
These include companies that fell from grace (Enron). While it is possible that they may see better days in the future, the odds are stacked against them. Its usually best to avoid trading these stocks. If you feel that the temptation ...
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Wall Street gurus and penny stock investors alike it seems, are more likely to purchase newly offered stocks that have an easily pronounceable name, say a pair of Princeton University researchers.

Adam Atler and Danny Oppenheimer found that a stock's performance immediately after an initial public offering (IPO) appears to be linked to how easily investors (penny stock or otherwise) can pronounce its name and stock ticker symbol.

Danny Oppenheimer, commented, "These findings contribute to the notion that psychology has a great deal to contribute to economic theory."

The two said the effect also extends to ticker symbols. For example, all things being equal, a stock with the symbol BAL should outgain a stock with the symbol BDL in the first days after an IPO.

"We looked at intervals of a day, a week, six months and a year after IPO," Atler said. "The effect was strongest shortly after IPO. For example, if you ...
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Investing in penny stocks is considered very risky as they are traded without any regulatory or listing requirements, which provide security to shareholders. There are no accounting standards, and the shareholder gets no information about the change of ownership of shares etc. This makes it a potential source of fraud.

However, with proper research, investment in penny stocks can be a tremendous earning potential. Not all companies listed with pink sheet stocks should be considered fraudulent. Some of them represent good companies, which are too small to meet the requirements of the NYSE or NASDAQ. Many such companies have a bright future. Unlike blue chip stocks, penny stocks have greater volatility; hence, they have the potential of sometimes reaping rich dividends in a relatively short span of time. Thus, investing in these startup companies at rock bottom prices can end up in making investors very wealthy.

However, finding these companies requires research. ...
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