Penny Stock Marketplace

Since our last post, Fannie Mae (Stock Symbol: FNM) sat at 82 cents and then close during the latter part of the week at 1.94.  As we had said, easy gains could be made here and Quazimoto isn’t about to let us forget.  A 136% gain is nothing to sneeze at.  Additionally, if your were on your toes, a potential 200%+ gain was attainable mid day on Thursday. FNM  did retrace slightly but we do still believe that this one has more upside potential.

Some of the best intra-day trading in recent history has come and gone and seems to be coming again.  With a turbulent market comes opportunity for profit on the long and short side.   

Quazimoto’s bottom feeding function gave signals of a buy for Fannie Mae (Stock Symbol: FNM) anywhere below .51.  I saw this the other day and ignored it choosing instead to hold my small position purchased last week at .81.  Quazimoto seems to be insisting that a price below .80 is a low risk, high reward play.  No reason was given but when this happens, I usually dig up some pocket change and plunk it down.  While this may seem like blind faith, the fact is that this stock will go either of two ways…up or down.  Quazi believes the steady volume after the major gap down coupled with the huge speculative nature of the market will more than likely propel this stock in an upward direction at least in the short term.  Adding in a lack of short sellers and Quazi’s buy signal lights up in a big way.  No guarantee that the ride up won’t be a bumpy one though.

Stock traders who trade without good sound reasoning become former stock traders very quickly.  The key here, as with most penny stocks, is to use only what you are willing to lose.

If you are inclined to daytrade, here are a few stocks priced between $1 and $10 that have huge intraday price swings.  These swings are greater than 20%! Note that none of these stocks are microcaps due to their high market cap but we have been known to break our own rules now and again.  Interestingly enough, these all happen to be insurance stocks.  Quazimoto made sure he limited the field by choosing stocks with a recent upward trend.

Radian Group Inc. (Stock Symbol: RDN)
Syncora Holdings Ltd (Stock Symbol: SCA)
Triad Guaranty Inc (Stock Symbol: TGIC)

As the market has been beaten down over the last few days, several microcaps have been (and still are) flying high.
These pharmaceutical stocks have been making new highs and show little sign of slowing down.  The best prescription if you want a piece of this action is to wait and watch for a slight retracement.  Jumping in now may cost you some time and money in the short run.  Sitting on your hands and letting these contrarians build a little cause for the next move up will pay dividends.  We’re just letting you know ahead of time so you can make room on your radar screen.

NPS Pharmaceuticals (Stock Symbol: NPSP) is currently trading at $8.69.
Pharmacyclic Inc (Stock Symbol: PCYC) is trading at $2.65.
Synta Pharmaceuticals (Stock Symbol: SNTA) is trading at $9.51.

All of these fit the criteria of a microcap with market cap under $500M and a share price of less than $10.  If Quazimoto’s timing software is working properly, these stocks are reaching the end of their current upswing and are due for a pullback.  If volume declines on the downside, the probability for a profitable trade will present itself.

Patience is a virtue…and often in short supply.

Reminds me of dear old great, great, great Grandpa Prescott’s order at the battle of Bunker Hill…

“Don’t fire until you see the whites of their eyes.”

Down days like this one give us the signal to run screens for stocks that bucked the system and actually made a couple of percent by days end.  Parameters for this stock screen included the typical microcap requirements for market cap ( less than 500 million shares) and stock price ( greater than $1 but less than $10).  We also threw in a requirement that the stock had to have been making gains over the last 6 months.  We got 12 hits.  Four of them were drug stocks. This sector seems to be showing strength relative to other major sectors.  More importantly, we picked up Pgt Inc. (Stock Symbol: PGTI).

As you can see, this stock, although thinly traded, has been stepping up on a regular basis and actually showed some strength on a day like today.

Pgt Inc. is a manufacturer of impact-resistant aluminum and vinyl-framed windows and doors and offers a range of fully customizable window and door products. Maybe we should have added this to our hurricane stock picks from several months ago.  More on this company can be found here. 

We are not betting the farm on this one but we will watch closely to see if we can ride the next wave up.