Friday's Stocks To Watch - PRMO, WAMUQ, UWRL, LKEN

PRMO this stock is getting ever so close to breaking out higher. This gold stock is starting to gain interest and could see a rapid ascent as the accumulation continues.

WAMUQ we know this stock over the last few years has rewarded investors big nice gains. We could be looking at a little run right here.

UWRL for those of you who think I have given up on UWRL, I have not. Actually it's UWRL that has given up on us by prolonging their promises. However I remain confident that when/if the company gets things straightened out, this stock will post a significant run.

LKEN those of you who saw my twitter yesterday were sitting on 100% gains today, before LKEN pulled back to $.001. I think tomorrow is a big day for this stock. I'd like to see it close higher to confirm that a new rally has begun.

Chart of The Day - SAEI

PRMO - On The Verge Of A Breakout?

PRMO looks right on the verge of a breakout. Trading today took place decidedly on the ask and I would not be surprised to see PRMO take a swing at $.0004 tomorrow. These triple zero stocks can take time to work through the supply of shares in the market, and I think PRMO is right at that point where the supply is shrinking and the demand for the stock is growing.

After all, this is a stock that boasts gold assets of over $12 million, revenue of over $6, and net income of over $2 million. This is all from their recently filed annual report. I think shares are tremendously undervalued.

With the company positioned to profit from the recent surge in gold prices, it makes sense that the share price of the company will follow suite.

Trading Pink Sheet Stocks Is No Game for Novices

Many people are intrigued with the huge profits some traders make in pink sheet stocks. These stocks generally trade at low prices. Some may even trade for under $1 a share. However, a small increase in the price of these stocks can translate to a large gain. For example, a stock trading for 50 cents a share would need to increase to only 75 cents a share for a 50 percent gain. Yet the investor, focusing on the potential profits, can overlook the risks associated with trading pink sheet stocks. As in most cases of investment, a high risk can equal high rewards, but it is important for potential investors to understand all of the risks before investing in pink sheet stocks.

What Are Pink Sheet Stocks?

Most stocks are bought and sold on exchanges. Some exchanges have a physical location where these transactions take place. However, some exchanges do not have a physical location. Transactions occur through a computerized network. Companies must meet certain standards to be listed on an exchange. For example, a company must have a minimum amount of earnings. Its stock must trade for a minimum price. The company must make certain public filings. Audited financial statements are usually required. Additionally, information on the ownership of the company must be disclosed. However, pink sheet stocks are not traded on an exchange. The pink quote comes through an electronic quotation system. Since these stocks are not traded on an exchange, they are not subject to the listing requirements. Pink sheet stocks are usually issued by small companies that cannot meet the stringent requirements for stocks found on the exchange. These are the kinds of stocks that typically trade at low prices. They are also often referred to by another name, penny stocks.

Risks Associated with Pink Sheet Stocks

A key to determining the value of a company is to carefully examine its finances. Pink sheet stocks are not required to have verifiable financial information to be traded. Therefore, the company may be unstable or even bankrupt. Owners who lack integrity can pose as the soundest of companies. There is no guarantee that you are not dealing with unscrupulous owners. The overall lack of information increases the possibility of being victimized by a scam or fraud. Although most of the companies traded on the pink sheets are legitimate, some are not.

Pitfalls for Novice Investors

Investing in pink sheet stocks places an increased burden of research on a potential investor. The investor must uncover sufficient financial information to justify the investment. While there are many sources of information, the average investor may not be aware of these sources. Even if the relevant information can be located, many novices are not skilled in recognizing reliable information. One must have the expertise to dissect complicated financial statements. An important part of the analysis is assessing the integrity and competence of management. And obtaining this information regarding companies in question can be very difficult. Some of this information may not be found in public records. These factors suggest that these stocks may not be appropriate for novice investors.

http://www.finweb.com/investing/trading-pink-sheet-stocks-is-no-game-for-novices.html

Thursday's Stocks To Watch - LKEN, PRMO, AWYI, KATX

LKEN I think this stock is starting to work its way higher after touching its 52 week low this week. We've seen how some of these "dump and run" stocks have performed, and it can be a violent performance. One that includes a rapid ascent higher. While it may just be a dead cat bounce, or it could be a longer term trend change, all that matters is the potential is there for gains of several hundred percent, which is why you read this blog in the first place.

PRMO those 7 market makers that were offering $.0002 yesterday had different thoughts today and wisely moved higher on the ask as they ran out of shares to sell. These triple zero stocks can take time to get going as investors accumulate shares at various levels. Today investors started accumulating the $.0003's and at the close only 4 market makers remained offering $.0003. You can already see how the supply of PRMO stock is shrinking, which means continued buying will only send the price higher. With the price of Gold continuing to climb, what better way to profit from this than buying a gold stock? Especially one I think people are finally starting to catch on.

AWYI the chart is a thing of beauty. The money flow continues and you have to think the next target is $.003. We could see that price by weeks end.
KATX I am surprised this stock is not trading higher than $.08-.09. This was a $.20 stock earlier this year when gold was trading at much lower levels. Anyone that's followed this blog that long knows I basically called KATX run from $.02 to $.26, so I am familaiar with this stock and how it trades. At these prices I think the odds are good of seeing a 125-175% short term return.

Chart of The Day - AWYI

OTC 101 - Regulation

The Basics
The OTC market and broker-dealers’ activities in the market are regulated by The Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and various state securities regulators. As well, companies with SEC-registered securities are regulated by the SEC. Pink OTC Markets is neither a stock exchange nor a self-regulatory organization (SRO) and is not regulated by either FINRA or the SEC.

Complaints regarding companies should be directed to the SEC, while complaints regarding broker-dealers or other investment professionals should be directed to FINRA.

The Rules
Key OTC market regulations include:

• Best Execution (FINRA Rule 2320)
• Limit Order Protection (FINRA Manning Interpretation – IM 2110-2)
• Firm Quotes (FINRA Rule 5220 & IM-5220)
• Initial Quote Disclosure Requirements (FINRA Rule 6440)
• Short Position Disclosure (FINRA Rule 34560)
• Minimum Quotation Size Requirements (FINRA Rule 6450)

Best Execution (FINRA Rule 2320) – FINRA requires member firms to find the market with the best price to execute their customer order. Pink Quote and the OTCBB Quotation System are the two recognized inter-dealer quotation systems for facilitating electronic best execution by broker-dealers. The two quotation systems may only be used to satisfy best execution if there are two or more priced quotes in a security. If less than two priced quotes exist for a security, broker-dealers must contact three other dealers for priced quotations. See complete text of Rule 2320.

Plain speak: Broker-dealers may not give their customers prices inferior to those currently being quoted on inter-dealer quotation systems.

Limit Order Protection (FINRA Manning Interpretation – IM 2110-2) – FINRA members may not trade for their own account at prices that would satisfy Limit Orders currently within their order book. See complete text of IM 2110-2.

Plain speak: Broker-dealers cannot use their knowledge of customer orders to provide customers with inferior prices. For example, buying a security for less than a known Limit Order price and then selling the security to the customer at the Limit Order price.

Firm Quotes (FINRA Rule 5220 & IM-5220) – FINRA requires every member to trade a security at its publicly quoted (Pink Quote or OTC Bulletin Board) price and size. See complete text of Rule 5220.

Plain speak: Broker-dealers must honor quotes posted on an inter-dealer quotation system.

Initial Quote Disclosure Requirements (FINRA Rule 6440) – To initiate quotations on an inter-dealer quotation system for an OTC security not currently being quoted or to resume quotations after a four day absence or SEC suspension, a market maker must submit a Form 211 to FINRA. Once FINRA approves the 211, the market maker may submit a quotation to the applicable inter-dealer quotation system(s) they selected on the Form 211. See complete text of Rule 6440.

Plain speak: In most cases, FINRA approval of Form 211 is required for new quotation on Pink Quote or the OTCBB.

Short Position Disclosure (Rule FINRA 4560) – FINRA members must report their short interest positions in OTC equity securities at mid-month and end of the month. See complete text of Rule 4560.

Plain speak: FINRA publishes the short interest list seven days after the 15th and last day of each month. This information is available for every OTC security on OTCMarkets.com.

Minimum Quotation Size Requirements (Rule FINRA 6450) – FINRA members acting as market makers by submitting quotations into an inter-dealer quotation system must adhere to the minimum size requirements set by FINRA. For example, all quotations with a price less than or equal to $.50 must have a minimum size of 5,000 shares. See complete text of Rule 6450 and view complete price-size table.

Plain speak: Broker-dealers must post quotes in an inter-dealer quotation system of certain minimum sizes.

More information may be found in Pink OTC’s ‘OTC Market Regulation’ or on the FINRA and SEC websites.

Feeling smart? Let’s delve into some more complex concepts and OTC Market scenarios in Part 4 – Advanced Concepts.

http://www.otcmarkets.com/learn/regulation