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How to profit from penny stock |
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Penny stock are stocks which trades for less than $5. Some saying that penny stocks are traded below $1. Penny stock is high risk, but can also reward high return. Penny stock can give you huge returns. To successfully play with penny stock, you have to know the right strategy. If you want to play with penny stock, then you have to understand about technical analysis. Let me give you example of my way. First I screen from Penny stock which have high volatility. I can use the tool from my OptionsXpress account. They have a screener tool that you can use for free. Here's what I look for: - Stock with the price from $1 to $5.
- Stock with minimum volatility of 50
- Minimum average volume 2000K
You will found some stocks. Look every stock's 3 months chart for stocks that recently breaks its resistance or support. When a stock reach its support level, it will be hard to go down again. And when a stock reach its resistance level, it will be hard to go up again. But when it breaks it's resistance level, it will goes up a lot, and when it breaks it's support level it will goes down a lot.   The idea is to find stocks that just breaks it's support or resistance. If it breaks it's support then short the stock, and if it breaks it's resistance then buy the stock.
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