DMGM - Will The Rally Continue Tomorrow?

Shareholders of DMGM are wondering exactly what their shares are going to open at tomorrow morning and close at tomorrow afternoon. After posting arguablly the most impressive buying session in recent memory, when it rallied from $.002 a share to $.225, shareholders are wondering if they made the right move holding over the weekend.

For those of you a little slow with the math, if you had purchased $1,000 of DMGM at $.002 they would have been worth over $110,000 at the high on Friday and are still worth over $75,000 right now. The big question now is what the stock will do tomorrow and throughout the week.

Will the stock open at $.20 or $.10? If Friday's trading action is any indication DMGM could open at $.30, or $.40. You never know. That is the fun and exciting part about penny stocks. You can truly make a fortune in a short period of time.

Back in the summer of 2007 SMXT went from $.005 a share to $.60+ literally overnight on news that hardly compares with DMGM. Also consider DMGM's small share count and the volume it received on Friday. There had to be market makers filling orders with shares not in their possession. Imagine selling shares you didn't have for $.05? Why not? The stock was already up 2000% it can't go any higher??? Or can it.

At $.15, Friday's closing price, those phantom shares are 300% in the whole. If the stock goes to $.30 that is a 600% loss. It can add up rather quickly and if the stock keeps heading higher with no sign of falling back shorters will be forced to cover their positions or risk losing a substantial amount of money.

When you short a stock or sell naked shares your loss is UNLIMITED. Your gain, however is limited. DMGM could hit $.50 and that market maker who sold 100,000 shares at $.05 thinking the stock had no chance of going higher is now $50,000 in the hole. With a small outstanding share count it might be literally impossible to buy back legitimate shares to cover that position without having a drastic upward movement on the stock. My point is that Monday, if DMGM continues it rally out of the gate, the stock could see an unbelievable short squeeze.

Either way it should be good for a trade or two on the dips and rips.