Trading 101
Want to be smart about making a lot of money in low priced stocks? Actually, this philosophy works well for all stocks. The key is to be willing to invest when stocks are under followed, then be a seller when everyone is piling in.
Today’s trading 101 lesson is a perfect demonstration of how well this style can work. The recent example is our giant win with current idea Luxeyard (OTC BB: LUXR). On April 12th- just 16 days ago, I published my first edition on Flash Sale Site company Luxeyard- this is the future of retailing. I stated I believed the stock was 50% undervalued based on the recent valuations VCs have awarded to like companies through investments.
The market rapidly became aware of LUXR, and the stock has been trading just gang busters of late. Since it was $.80 at the time of introduction, if it was 50% undervalued at $.80, it would follow the stock would be fully valued at $1.20. The stock has since seen a high of $1.60.
After running to $1.25 in short order, I revealed I had been a seller of part of my position about that $1.20 level on the first run. After all- $1.20 was my fully valued number. When the stock pulled back as you can see in the chart, I suggested there was a “mulligan” for those who missed the first big move in my April 19th edition.
This past week has been huge for this stock, and I took advantage of the opportunity to further lighten up on my position. This is Trading 101. When you see big surging bars for both volume and price, it’s generally a good time to lock in some profits.
I was once again a seller of part of my position earlier this week when the stock traded up over $1.50. LUXR has so far been a good candidate for trading as it has been extremely volatile- both up and down. This past week there were a couple of huge spikes up accompanied by big volume. Those are the days you want to lighten up your position.
Note the stock fell back the last couple of days on much lighter volume, suggesting another volume surge would take it back up rather easily. There’s fewer sellers than buyers, but if the volume bars surge as the stock pulls back, my view could change.
At this point, I’m a buyer if it pulls back much farther, and a seller if it surges again with high volume bars.
That’s Trading 101 for today. Big Volume and Price bars on a chart like this should suggest to you to lighten up. Low volume retractions are a chance to add to your position. I remind the readers I am an investor in both free trading and restricted share of LUXR with my own capital.
One Step Ahead
So, if you’re going to be a successful penny stock investor, you have to be one step ahead of the market, and accumulate when no one is watching. You have to like the company, you have understand the chart, and it helps to be a little lucky timing wise.
There are two stocks in my coverage universe that I believe are likely to deliver major fundamental developments- the kind that sends the stocks running up the charts.
Those two stocks are Plandai Biotech (PLPL- March 26th Edition) , and Nuvilex (NVLX- March 19th Edition). I’m committed to covering both of those companies for six months as I see both of them having very significant upside in those time frames, and want to give everyone the maximum opportunity to profit handsomely from both of these ideas if they work out.
In my last edition on April 24th, I suggested PLPL had gotten quiet enough to jump in- sure enough, this past week the stock surged from $.20 to $.29 before giving ground of only 1 crummy penny. See how this works? I’m expecting PLPL to deliver in a much bigger way when it completes the promised $13 million financing from the South African government to begin the process of delivering it’s miraculous version of Green Tea Extract.
My other longer term following is Nuvilex (NVLX)- the company that has Encapsulation Technology for drug therapies proven to enhance the ability of drug therapies. Clinical trials done in Germany about 5 years ago on Pancreatic Cancer patients yielded remarkable results.
NVLX is now gearing up to take it’s unique therapy systems back into a clinical environment and move the process of eventual commercialization one more step. Capital is needed. Stand by for developments and more upside on the stock.
This little $.07 stock offers a ton of upside from this super cheap level. It popped from $.05 this past week, and it’s just a development or two from finding $.25 in my view.
I plan to be talking about NVLX Monday morning on the BigBizShow at about 12:30 Eastern, 9:30 Pacific. Tune in if you want to learn more about the company. Here’s how you can view the show:
Catch Me Live Catch me LIVE!! on TV every Monday from 12 to 2PM eastern on the BigBizShow. The show broadcasts on several hundred radio shows live, is syndicated to over 30 milion cable homes, and is broadcast on the Armed Forces Radio Network in 79 countries. Simply go to www.bigbizshow.com, and click on the “Watch Us Live” button. I’m the guest host on the show every Monday. |
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