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1c-4c Penny Stock PHENOMENON

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YOUNG_TRADER

Joined
18 February 2006
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Is it just me or are we in a very funny period where only 1-4c Penny Stocks run?

I am so sick and tired of the market selling good fundamentally undervalued companies which release good news and results,

Yet will happily run to crazy levels penny stocks

Here are the penny stocks I have observed running like crazy, some actually do have fundamentals and thus a re-rating was warranted, but in most cases the re-rating was unreasonable or not warranted in the first place.



FDL ran from 1c - 15c (Iron Ore target near FMG)

HAO ran from 3c - 40c (Acquired Iron ore grounds)

GDA ran from 1.5c - 6c (Placement/SPP + Iron Ore projects)

GNL gapped up from 3c - 8.5c (Iron Ore projects)

EGO ran from 0.7c - 6c (few months back based on leverage to oil well)

BMO ran from 2c - 6c (Gold targets)

RSL ran from 1.5c - 3.5c (Uranium grounds)

ORO ran from 2c - 4c (Nickel?? Gold?? Not sure)

RCH ran from 0.6c - 5c (Not sure ?????)

RAU ran from 2c - 28c (rerating based on Cu/Au deposits)



So the big question is what will be next?

The clear theme I see here is a cheap mkt cap/price ie 1c-3c with the bigger gains being seen in the Fe Iron ore specs
 
I think this is a case of people thinking that the lower the price a stock is, the lower its market cap is.

It seems indicative of a red hot spec sector, with no one actually having any clue about valuations or even shares, just wanting to make money by following the crowd!

I think a lot of this pump and dump behaviour can be facilitated on certain forums and i will watch some of them and post in this thread what their next 'big stock' is...

watch this space, but remember that most of these stocks have no real fundamental basis for their moves


In order to avoid too much ramping can we at least try and provide some evidence ... even if there is none
 
The market is a fickle beast - I wouldn't bother trying to guess. You can narrow it down, for instance, Iron Ore is still the way to go but beyond that, the herd is chaotic and often irrational.

I bought some MPJ a little while ago on the basis that it was a relatively low risk penny dreadful since the SP is underwritten by its shareholdings in other listed miners and its cash balance. They've also got some pretty low key exploration of their own tenements going on. I figure it's this that will move the SP as you can essentially buy their own tenements for free right now.

I highly doubt the HC boys that try to ride ramps to financial freedom do very well. Sure, individually they occasionally make a killing in very short order, but they tend to also be the ones left without a chair when the music stops. I'd say its likely that their style of trading means that a single loss is likely to wipe out several months worth of gains, if not more.
 
It is certainly a very strange trend, not that I'm complaining because these stocks are my world, its where I spend most of my research time.

What usually happens is an announcement kicks the run off by drawing attention to the company and then its on for young and old.

It seems that everyday now, there is 1 or two stocks that rise 50% plus on momentum from a previous announcement.

The hard part is indentifying the stocks that are going to surge, have done very well in the early part of the year on both GDA,RSL before they ran and have also done well trading FDL many time, although not getting in before the iron ore announcement.

As a heavy trader in the spec sector you start to get a feel for companies that are going to run, it maybe something as simple as market sector followed by forum chatter, a rise in trading volume, or a rise followed by consolidation then sparked by upcoming news.

For anyone interested check out PRE and EXM both spec gold plays with results due, that could significantly move the shareprice, both have run hard before and are likely to rise again on any good news, but remember they are spec plays so DYOR.
 
Need go no further than some of the threads on ASF, current that I believe will double or more soon, JRV (2cents) and RNG (3.8cents) A bit higher in price is SRI 12 cents. Dont just look at the last couple of posts, read over the whole thread, in each case, and you will get a good idea of the real value and potential
 
My question to the experience traders like YT and Mick, how you find and pickup these penny stock before it runs?

As I work full time and find it difficult to find these penny stock. Is any software or any broker that specialize in these penny stock that I can subscribe??
 

You can't pick it.

It has always been, the more anticipated the news, the more likely it will get sold down. The lower the profile, the more it runs.

Reason is that lower profile stocks are cheaper to create a breakout as it is not being actively traded. So some people have caught on to the fact that daytraders are happy to mark the price up for them. All they have to do is throw in a lot of money to take out the supply by surprise. Then make lots of posts on HC.

People do not like to hold stock in a volatile market so they look for these types of stock, and I estimate a large majority of them are following internet message boards for the latest breakouts.
 

All this happened from the announcement below

• Initial Inferred Resource of 415 million tonnes of thermal and
coking coal;
• Potential to increase resource tonnages;
• Properties located close to infrastructure and power stations;
• Properties previously owned by BHP Billiton and BP Coal and now
available due to change in Minerals and Petroleum Resources
Development Act (MPRD);
• Project partner Lukale Mining Pty Ltd is a Black Empowerment
Enterprise;

Imust admit CDS resilience to market forces at the moment is encouraging

IMHO
 

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sam76 said:
All this happened from the announcement below
...edited for brevity...
Imust admit CDS resilience to market forces at the moment is encouraging

IMHO
Click to expand...
Sam76...
Out of interest, what was the date of the announcement in relation to the chart you posted? (Just to correlate time and upward move...)

Scuba
 
Scuba said:
Sam76...
Out of interest, what was the date of the announcement in relation to the chart you posted? (Just to correlate time and upward move...)

Scuba
Click to expand...

Hey Scuba, 4th of November was when it went into trading halt relating to the SA coal aquisition.
 
Hiya Sam, your answer gives a bit more cred to the saying "Buy the rumour, sell the fact"...
Price moves up in September... Announcement posted 4th November...
Moral of the story is; Have lots of friends in the know!
Sorry about reposting a chart but wanted to show a point...
 

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Hi Sam, does CDS deal in Coal?

I getthe below from COMSEC!, not sure why

thx

MS

Business Description
Comdek Ltd (CDS) is engaged in supplying of broadband satellite data. The company has four business units: Comdek Satellite Communications, Comdek Computers, VianetAIP and eSat Pty Ltd (eSat).
 
hey Micheal,

I think this thread is being hijacked by me and CDS

I've posted my reply to your question in the CDS thread.

Cheers
 
prawn_86 said:
It seems indicative of a red hot spec sector, with no one actually having any clue about valuations or even shares, just wanting to make money by following the crowd!
Click to expand...

Sounds a little bit like the I.T. boom (and then the eventual bust) in the late 90s, doesn't it?
 
juw177 said:
People do not like to hold stock in a volatile market so they look for these types of stock, and I estimate a large majority of them are following internet message boards for the latest breakouts.
Click to expand...

I agree. People do not want to hold small or mid caps now as they have never really recovered after August falls. So if you want to own a stock longer than 5 mins it needs to be a blue chip. Othwerwise day trade, the longer term spec market finished though we hope for gold stocks to buck the trend soon.
 
For those interested I have done a post on NSL as I believe it is a spec that has potential to be re-rated on the back of the Iron Ore project its acquiring in India

See the thread
 
PEN

Company Profile

--------------------------------------------------------------------------------

Peninsula Minerals Ltd (PEN, formerly Kanowna Lights NL) is a mineral exploration company. PEN has projects primarily in Australia, Africa and Fiji.


Capital Structure ($ 000s)
Total Debt 663 Interest: 0
Long Term Debt 0 (0% of capital)
Preferred Stock 0
Shareholders Equity 26,532 (100% of capital)
 
I've also noticed, by some conversations on the place we are discussing, that if a share is priced at 1c, and another is priced at 10c, apparently the 1c is a better stock and more likely to "go off".. It seems the number of shares on issue aren't even considered.. wtf? surely people know better?
 
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