I bounced this one off Frugal in another thread tonight ..
It is a prime example of a Festering Canker. For some reason I feel more at ease throwing money at an FC than I do at a fancy looking balance sheet, but maybe I just like cheap Stocks
Anyway, I've been in this one (XTC) since 28 Feb this year. at $0.002
Could have sold out and doubled my investment less than a month later, but I only put a small wager on and always intended to hold for a bigger piece of pie, or alternatively end up with nothing (Zero is my stop loss which is also unlikely)
XTC price action was again frisky over the last few days with Punters buying at 0.003 when there appeared no reason to stump up the additional premium.
Today, the 003's got line wiped so that is the new level for the time being.
Point of the post is ...... FC's are a punt, but there are often "tell tale" signs.
Main ones I look for in order are:-
1) Small/Tiny Market Cap
2) Price that has been belted up for a long time and usually going sideways for a long time
3) Unusual Volume movement ... sometimes accompanied by Price movement but not always
4) The Volume movement is sometimes weeks or months before anything happens ... therefore
5) Check the Co's Fundamental position!
6) Do they have something of potential in the pipeline/to offer. How much could it be worth?
7) Finally, if they have some/enough available cash to back all the above up ... then,
8) Accumulate at the Lows.
The amount invested is relative to the amount of confidence (1)-(8) above instills
In this example, XTC is very Spec, so I only put a small wager on so my Stop Loss is "lose the lot" and my Profit target is 4X my initial stake.
Given the current price action, I think it may have another move soon, but I would not be paying 0.004 for it ... That is why FC's should be accumulated at the Lows. Limited downside/lower risk