Penny Stock Liquidity

Low Volume and Penny Stocks


You have probably heard the old saying, “Sell in May and go Away”. Art Cashin from UBS made it famous in the 2009 crash. As you know, many mutual funds and hedge fund managers vacation during the summer months while volume and liquidity dries up. Due to the lack of buyers, it becomes very difficult to stage sustained rallies.  Short sellers typically don’t like to short dull markets. It’s not very hard for sellers to gain control. Now how does this relate to penny stocks? As we know hot penny stocks move on retail buying. Now it’s safe to say that if we are in a dull to down market.

Even your most aggressive penny stock trader is going to hold back some of his ammo. While everyone always hopes for a summer small cap rally, it doesn’t always happen. For every hot stock like MOP Environmental Solutions (OTC.PK: MOPN) that moves, there is a cult stock like Cascadia Investments (OTC.PK: CDIV) that slows down a little bit. The difference between these two names is that the volume in MOPN has surged due to an event (BP contract) and CDIV has slowed purely due to a lack of interest.

So keep in mind that in low volume markets, penny stocks will breakout less often. However world events that can create huge gains still happen. This is more prevalent in the penny stock arena. Just try not to trade just for the sake of trading. Remember to pick your spots. The potential for massive gains is still there, just less frequently. Being bored is better than losing money.

stock volume Penny Stock Liquidity

 

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Tesla IPO and OTC:ELCR

Tesla Motors and the Electric Car Company


tesla motors logo 300x259 Tesla IPO and OTC:ELCRThe much anticipated Tesla Motors IPO will begin trading on Tuesday. Goldman Sachs, Morgan Stanley, JP Morgan and Deutsche Bank are the lead underwriters. The offering has also increased in size due to demand for the shares. However, Tesla is the classic concept stock and has never turned a profit. Does that matter ? Probably not.

Generally concept stocks due exceptionally well in good markets, but tend to get destroyed in bear markets. For instance the solar stocks went down faster than the broader markets in the 2009 crash due to a constant lack of earning visibility and their concept status. In Tesla’s case, the shares are oversubscribed according to some IPO services and may trade at a 1 or 2 point premium on day one. Tesla’s electric cars sell for more than 100k before tax credits which differ from state to state. They have also sold only a little more than 1000 cars. Due to the hype surrounding the deal, fundamental analysis will probably fall on deaf ears in the first week of trading.

As always we try to link some of the hotter ideas in the broader markets to penny stocks on the OTCBB.  In this instance look for possible increased activity in Electric Car Company (OTCBB: ELCR) or Li-ion Motors Corp (OTCBB:LMCO). These companies specialize in electric car conversions and may see some sympathetic buying due to the interest in Tesla motors. Time and time again we have seen micro-cap stocks turn into hot penny stocks due interest coming into a larger company within the same space.  You don’t need to act yet. As a matter of fact you may not need to act at all. Just be ready. Massive gains in penny stocks are a lot easier to obtain if you have the right information and are prepared.

tesla motors ipo Tesla IPO and OTC:ELCR

Tesla Motors IPO


 

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How the BP Oil spill affect Penny Stocks

BP Stock Price and the affect of the Oil Spill


bp logo1 150x150 How the BP Oil spill affect Penny StocksWe all know that every time there is a worldwide event, investors have a chance to capitalize and make money in the markets, especially when it comes to an environmental disaster.  The news bring a lot of attention to the stock market. It happened with the Exxon Valdez and Katrina. Now it’s happened again with larger companies like British Petroleum (BP), Transocean Ltd (RIG) and Halliburton (HAL) have been punished. Every time an event like this happens, several penny stocks come into play.  Shares of MOPN took off after they received a purchase order from BP for their MOP Maximum Oil Pickup product.

Other penny stocks like EVTN and EVXA also received a large amount of attention from the environmental disaster.  All of these companies instantly became hot penny stocks.  You should throw these three companies on your penny stocks list and keep an eye on them.  Many investors will try to buy familiar names that historically react favorably oil spills. Longer term investors may buy companies like MOPN and EVTN and are hoping for a home run while penny stock flippers and day traders step in and provide constant liquidity.bp 300x189 How the BP Oil spill affect Penny Stocks

In the end though only a select few of these names actually benefit from these disasters financially. Only a few contracts are actually given out, so be selective.  Keep in mind that profit might be short lived so be prepared to take a quick scalp. Once again the key is being prepared. You need to know which stocks move based on an event. So have your lists of blue chips, mid-caps and penny stocks ready, and be ready to pull the trigger.


 

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IPO Offering and Penny Stocks

IPO Calendar and Penny Stocks……Is there a Trend ?


ipo offering1 IPO Offering and Penny StocksPlaying an IPO offering is just as confusing and challenging as investing in blue chips or penny stocks. Yesterday we saw Hudson Pacific Properties (NYSE:HPP) priced @ $17 and as of right now it is trading to 17.40. Now this was a deal that many people thought would be dead in the water. Prior to this offering, five REITS have done IPO’s this year. All five traded lower on the first day. Does this change the trend of IPO’s trading at a discount on the first day? Probably not. The new issue/secondary calendar tends to get a little thinner in the summer months. So developing any type of trend might be a little difficult.  A lot of IPO investors are high risk high reward investors, the same type of investors as people who buy penny stocks.  They both have something in common; neither likes to lose money.

So if IPO’s are not priced more favorably for retail investors and institutions, we may see even more deals cancelled or delayed in July and August. Nothing in the market is easy to predict.  Nobody has a crystal ball.  We are always looking at hot penny stocks and trying to predict the next winner.

Check back for more updates and free penny stock picks.

 

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Stock Watch (OTC:VIZS)

5 Reasons why we love VIZS long term and short term

vizs stock chart Stock Watch (OTC:VIZS)

1. VIZS is a minority owned business.  Fortune 1000 companies MUST spend money with diverse businesses.  VIZS has a great angle here.  So much money is being spent that VIZS would only need to capture minuet fractions of these budgets to generate huge revenue.


2. We love gold, silver, oil etc.  But this is something unique and different that we feel will attract investors to this penny stock.  There are a thousand different gold companies, while there are only just a few private jet booking companies in this massive $8.5 billion dollar industry.


3. VIZS just started to trade.  It is a virtually unknown company right now.  VIZS was up 14% yesterday on news of just a $2 million revenue acquisition.  If the company has any other news that they are waiting on releasing we could see a buying frenzy.  Investors are always looking for a ground floor opportunity.


4. BUZZ:  If people aren’t talking, they aren’t buying.  The internet is humming with chatter about VIZS.  Everyone is talking.  Since the company just started trading, investors could be looking to see where the price settles and gets comfortable.  If VIZS closes in the green again today lookout.  The eyes that will be on VIZS could cause an EXPLOSION!!


5. VIZS is obviously looking to expand.  They already announced one acquisition.  If VIZS continues to buy companies that are already producing revenues and have a large client base we could see an impact.  I like that they are out there buying out competition.  Many companies are shying away from owning private jets after the debacle with the Auto industry execs flying to Washington in their private jets and asking Congress for a few billion like it was pocket change.  VIZS can book you a flight almost anywhere with just 4 hours notice. Here is the Vistar Press Release



Everything is looking good for VIZS on the service.  Only time will tell.  All I know is that I love everything I see so far.

Even if you didn’t participate in VIZS, keep your eye on it.



 

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