Just because a company is paying someone to pump its stock it doesn’t mean the stock won’t increase substantially in value. Actually the stock could see serious volume and a high level of liquidity, which are two very important things to look for in a penny stock. Just like any other penny stock remember that the rug can be pulled out from underneath you at any point in time. Also watch for the “sell on the news” phenomenon. It can be like clock work with these promoted stocks. The key to promoted stocks is to get in before the crowd and out while the stadium is still sold out. Otherwise you’ll find yourself stuck in the mad rush for the exits.
We can all be jealous about the huge sums these companies dole out to have their stocks pumped. We find ourselves using our hard earned cash to purchase positions while these unscrupulous promoters are simply handed shares/cash just to tout a stock. How hard can that be? Just be wary before buying any penny stock and know whether or not its being promoted, because a promoted stock always has a final death plunge in it, and you surely want to avoid that.
Finally, never believe the hype. Enjoy it, bask in it, but never believe it. Just trade it and you’ll do just fine.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment