The LEXG Party is Over

LEXG Pulls Back


Today we saw of reversal of mass proportions on Lithium Exploration Group (LEXG.OB). The run that led penny stock traders to the promised land, and finally turned sour. Now, I will be the first to say that trading volatile penny stocks and microcaps is one thing, and owning them for the long term or even a mid-length swing trade is another. I will also admit that we add names like LEXG and other volatile names to our list of stocks all of the time. But, when is enough profit enough profit ? Why would somebody who bought at 3 or 4 not sell at 9 or 10 within a week ? In our stocks to watch pieces, we research names that will be newsy and volatile, often before the moves happen.

Yesterday’s trading action in LEXG showed us, in Alan Greenspan’s words, “Irrational Exuberance”. The point I am trying to drive home is that there is difference between holding Apple Computer (AAPL:NASDAQ) after it makes a 200% move and even the best penny stock. Common sense tells me, that if you have a double in a hot penny stock, you have to take something off the table. No matter what, the PR’s, or message boards say. This morning, LEXG was actually up fractionally in the pre-market and then an onslaught of selling followed. The stock tried to mount some support at the $9 level in the early AM, but once it broke this once massive gain became a falling knife. It hit a low of $3,50 and bounced and is now stuck in a quagmire between naked shorts covering, day traders scalping, and blown up longs throwing in the towel.

I will not go as far as to say that, LEXG is fake, but to invest long term in any company with this type of market cap and miniscule revenues, is usually insane. Especially after it’s run up.

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Renren IPO

Will The Renren IPO Impact Shares of KUTV ?


renren ipo Renren IPOKu6 Media Co., Ltd (KUTV:NASDAQ). is as an online video company in China, and it owns and operates ku6.com. The site is basically a social media site that operates an online video portal. Even though shares of KUTV have run from the low $4 range to almost $8, on the anticipation of the Renren IPO (RENN:NASDAQ) they have the potential to run higher. Renren is another Chinese Internet company that is in the social media space. The company has over 30 million use and thier site renren.com appears to be sticks. Users spend over 7 hours a month there. It sort of sounds like a poor man’s Facebook. But what’s wrong with that ?

Any individual who mildly follows the market nows that shares of RENN will trade next Wednesday. Even though the deal has over 50 million shares most IPO experts feel a two to three point premium, or even more is likely. The market cap of Renren IPO will be roughly $4million at it’s suggested offering price. Now how do you play this ? Especially since IPO shares of RENN will be few and far between for retail investors. Institutions might sell stocks like Sina Corp. (SINA:NASDAQ) or Youku (YOKU:NYSE) simply to diversify, or they may look at cheaper sympathy plays like KUTV.

Before I wrote this piece I scoured the internet looking for Chinese social media penny stocks to add to my list of stocks. Surprisingly I found nothing remotely close. However, that’s when I stumbled across KUTV. It closed on Wednesday with a market cap under $250 million, even after its recent massive gain.

By no means am I saying to jump out tomorrow and buy shares of KUTV in the pre-market Thursday morning, but you should definitely add it to your list of stocks. A lot of the easy money has been made already, but it could still pullback. This small cap name fits nicely on a list, especially in between your large caps and penny stocks. I often write about sympathy plays in my frequently posted stocks to watch list, and KUTV seems to fit this description nicely.

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LTUM – Lithium Corp

Is LTUM the Next LEXG ?


Lithium Corp. (LTUM.OB) is an exploration mining company that issued a positive PR yesterday. However, that wasn’t the reason for the shares of  LTUM turning into one of the super hot penny stocks yesterday and tripling in price. Quite often, on our stocks to watch list, I highlight sympathy plays. A sympathy play is a stock that to some degree mirrors the performance of  a stock that is moving, The performance of the sympathy play is almost purely based on how the hot stock does. In this case LTUM and a few others made massive moves on the back of LEXG.

Now, can LTUM continue to rise after yesterday’s sympathy move ? It could and I will give you a good reason if it does. Everyone wants the next LEXG, and LTUM is one of the more well know lithium mining penny stocks. From this level, I am not guessing where the stock goes, but shares should be active on Friday. Swing traders, penny stock scalpers, and naked shorts all should be coming out the woodwork soon, as they do in most hot penny stocks.

Lastly, the sympathy play on LTUM started when the stock was under 40 cents yesterday, ended when it hit $1. Now the shares probably trade on their own merit, and this is why. There is one key factor for LTUM today, and it’s pretty simple. Where will LEXG profit takers go with there funds. If they roll into to LTUM, buying sometimes begets more buying. Then this one could get crazy, these penny stocks mining plays can go the other way too, and are very risky. We are not making a market call here, but certainly add LTUM to your penny stock list and do a little do research.

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LTUM, SLV, N, ENTI, LVS, WHR, CLWR, S, EWJ

Stocks To Watch – Large Caps to Penny Stocks


Heads up on some names that could prove to be active on Friday. Some potentially hot stocks are listed below :

Lithium Corp. (LTUM.OB) Forget the fundamentals, charts, or the the fact that they announced some positive brine sampling news this morning. The stock will probably trade higher or lower based on amount of buyers and followers of the Lithium Exploration Group (LEXG:OB) that come into the name. LTUM is a pure sympathy play and should be added to your penny stock list. I want to apologize for not mentioning it earlier in earlier pieces. We are always mentioning sympathy plays and I simply missed this name. Despite putting LEXG on the watchlist in it’s early stages of the move.

IShares Silver Trust (SLV:NYSE) This Silver ETF is a common name on our stocks to watch list. Probably too common, but it ripped again today, and simple needs to be watched. At this point the gold to silver ratio, fundamentals, and industrial uses of silver are out the window. The precious metal is probably going where traders want to take it. Also, since I mentioned sympathy plays, look for a silver mining penny stock to add to your list.

Netsuite (N:NYSE) Don’t now much about this name, but I do know that it’s are up in the aftermarket on earnings and is the highest trending stock on Yahoo Market Pulse. I don’t wan’t to give you direction, but there should be some action in the AM.

Encounter Technologies (ENTI.PK) As you guys already know, I like to highlight the most active IHUB message board. But today, I am going with the second most active because you already know about LEXG and it’s first. ENTI is just another sub penny stock that’s become watched. Today the sellers were stronger, and ENTI was down a little over 11.11 %. Is it a bounce candidate for a sub penny stock scalper ? We will see.

Las Vegas Sands (LVS:NYSE) I just want to mention this casino stock because the group has cooled off a little. On a chart LVS is looking like it’s trying to find it’s sea legs. It still has the lower highs above as resistance. I am not sure if this is dead money for now or breaks sharply in either direction, but it merits attention.

Whirlpool (WHR:NYSE) Cramer plugged the company on the Lightening Round, so it probably sees a little premarket action. It’s funny though, there are some who buy Cramer picks and there are others who short or fade his buy recs. Anyway, WHR was down today and could be a bounce candidate on Friday.

Clearwire (CLWR:NASDAQ) Down again after doing a secondary offering on Wednesday. Great story, and everyone talks about spectrum, but CLWR seems to be a chronic disappointment to longs. Many thought this would participate once Sprint broke out over $5, CLWR is just a hard story to grasp.

Sprint (S:NYSE) Since I mentioned CLWR, I might as well throw in Sprint. It traded nicely today and was up over 6% , but remember, there is a gap to fill from yesterday, so don’t be surprised if it briefly retraces. Also, remember that Sprint is in a super competitive space.

Radient Pharmaceuticals (RPC:AMEX) This name was also on our list of stocks to watch earlier in the week. Today, RPC was the top gainer on the AMEX and was up over 15%. As I said in a prior piece, you have to keep an eye on this one and be ready to jump in once you see volume. We hit a home run on this one a while back and alerted our subscribers, but right now this is probably just a trading vehicle. So don’t be surprised if it retraces.

IShares Msci Japan Fund (EWJ:NYSE) I’ll close with this one and be super brief and to the point. Doesn’t it just feel like the Japan economy has bottomed ?

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Toys R Us IPO

Toys R Us IPO Date


Today’s piece is based on the Toys R Us IPO that is expected to price and trade sometime in the near future. In addition to our stocks to watch list and penny stock alerts, we want to give our readers and subscribers a brief background on the company and touch on the current perceived demand, and timing of the deal. Toys R Us is a well known company and the offering could get decent coverage on cable news networks in the upcoming weeks. We just want to give you the heads up first.

toys r us ipo Toys R Us IPO2011 has been a big year for private equity based IPO’s. Some like HCA Holdings (HCA:NYSE) did well, while others have faded. Toys R Us (TOYS:NYSE) was taken private by KKR, Bain and Vornado for $6.6 billion in 2005. Sometime in the near future, the Toys R Us IPO is expected to do $800 million. This deal was rumored to come a little earlier in the year, but for some reason it never materialized. Despite the vast name recognition, and the perception of a turnaround in the business model, many IPO ratings experts are only calling for a slight first day premium, which surprised some , who expecting were Toys R US to have fast rising stock potential.

Maybe that rating is based on the street’s view balance sheet ? I tend to agree with the experts about this one not being a screamer, despite the impressive lineup of underwriters being impressive with firms like Goldman Sachs at the top of the list. Still, add this one to your list of stocks. Oddly enough, at this point, Toys R Us IPO looks like a deal that brokerage firms will probably allocate to retail clients.And trust me, that’s not always a good thing. Here is one last tip, experienced IPO investors often shy away from private equity deals. Mainly because in reality, they are on the other side of a firm like Bain or KKR’s sell trade. To make it even more simple, you are buying their stock.

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