So where do I start to find hot penny stocks?
-When starting your search for hot penny stocks, ideally you need to find a reputable and real company. Often times penny players can make money on fake, scam based companies, but the risk in trading these stocks is sky-high. By finding a company with good intentions, and a real product that has real demand, the risk of losing your investment is greatly reduced.
If you are a beginner to investing, just finding such a company can be a seemingly impossible task. Without knowing where to look, or what exactly to look for, there is no chance of success. In this case, you are most likely better off to examine the research and follow the guidance of an experienced penny stock pick service, or newsletter. There are many sites out there that provide penny stock picks, including this one. Here at TheThirdDimension.net, our number one goal is to provide our visitors with reports and evaluations of REAL companies.
Our Featured Hot Penny Stocks:
To see more details on our Picks check out our Blog!
KATX - We never put out a buy call on this but we should have! We did put it on the watchlist on 1/14/10 however while it was still trading under .04.. We hope some members took a look and grabbed some shares. It's up over 100% so far. We sold our position 1/25 and will wait for consolidation to get back in.
CMCA - Put on watchlist 1/14/10. Official buy call on 1/18/10. We currently own 15,000 shares at .07.
OPXS - Buy called on 1/12/10 at ~.135 entry. We were disappointed with volume following through after the news and sold at .13 for a small loss.
TDGI - We called for accumulation of TDGI in the low .02s on 1/6/10. The stock provided an easy entry at .02. As of 1/20/10 TDGI had a high of .036 with an easy exit at about .035 for a 75% Gain in under 2 weeks!
SKGO - Buy called at .0014 on 12/10/09. Stock soared as high as .0048 into the end of the year and into the new year and offered multiple opportunities to unload shares in the .0040s where we recommended a sell for a 300%+ Gain in just 20 days!
OWVI - Called for a weekend play at .0036 on what looked like a potential breakout. Traded briefly at .0040 and backed off. We called an immediate sell at .0037 on our blog for a small gain. Stock sold off afterward.
MHTX - Called at .15 on 11/20/09. Stock never got going and has settled into the .11-.12 range for a long period of consolidation (~20% loss). We believe in the future of the stock and think it could make an upward move soon, but we do not currently own any shares.
EMGE - First buy 10/7/08 at $1.04. Hit $4.59 9/25/09 for over a 440% gain! The stock was suspended a few days later.. however if you check our history you will see we were one of, if not the only ones covering EMGE that urged profit taking all the way up. The stock is trading on the Grey-Sheets with low volume. We believe shares will increase in value once the stock is back onto a quotable exchange.
CVM - Buy alert at $1.37 on 9/17.. cautionary sell alert at $1.39 9/18 but stock continued to run over $2 for a 45%+ gain on 9/19.. You can't win them all.
EDAP - This has been a steady loser for us and cannot gain a fair value on the market. We still believe it is a great company poised for awesome gains, but calling the bottom is like catching a falling knife and we've failed a few times already.
DVAX - Dynavax Technologies Inc. - First sell call at $3.10+ for a 470+% Gain from our initial buy call of $0.66! Accumulating shares under the $2 mark - As of 9/25/09
IDOI - IDO Security, Inc. - In at .0054, out at .0078 for 44% gain overnight! - Completed 8/3/09
To see more details on our Picks check out our Blog!
What is Technical Trading?
-To start trading without the advice or research of experts... finding hot penny stocks, researching them, and determining where to buy and sell are all tasks that will be on your shoulders. The next best place to start your venture is in the realm of technical trading.
To find the stocks that are likely to move, many traders run what is called a 'scan'. A scan is basically a filtered search of all stocks. One can set filters to find stocks with abnormally high volume, price movement, or any combination of a multitude of other indicators that can identify hot penny stocks. When they get a list of results, then it is time to check out the stock's 'chart'.
What are some Stock Scanning Tools?
-Arguably the best service a trader can use to find hot penny stocks is EquityFeed. A subscription to EquityFeed's Microcap service gets you pro-level real time charts, level II quotes, active stock listings, screening and scanning utilities, pattern matching and much more. The price of the subscription is substantial, but the advantage it gives you over the average trader greatly increases your chances of success, and your profits. We use EquityFeed at TTD.net and we easily make back the subscription price with profits.
-Another good tool to use is StockCharts.com's Stock Scan page, featuring a listing of many common predefined scans with links to qualifying stocks, as well as the ability to create your own scans. The main disadvantage of this tool is it is not real time, and not streaming. This is fine for slow trading strategies, but won't give you the 'quick-jump' advantage over other traders.
-If you have TDAmeritrade®, you can use their screening utilities, including the new Pattern Matcher™ tool built into the Command Center 2.0. This is an great tool for finding stocks that match a particular chart pattern (ie- cup and handle, double bottom, etc). This is a free utility for all TDAmeritrade clients. Also very useful is the Advanced Analyzer, a desktop utility allowing selection of 100 preset conditions for screening stocks. This is free for all TDAmeritrade Apex clients.
-You can also screen stocks with a basic screener from one of the websites below. These allow you to define market sector, price range, PE ratio, volatility, and much more. Most are geared for small to large- cap stocks however, and may not be best suited to finding hot penny stocks.
-Yahoo Stock Screener
-MSN Stock Screener
-Google Stock Screener
What is a 'chart'?
-A stock chart is a graphical representation of that stock's trade data, collected every minute of every day. A very basic chart will show the price of the stock on the Y-axis vs. time on the X-axis. Along with this there may be an 'indicator' or two. An indicator takes the input data and outputs a result based on a specific mathematical operation. Indicators allow chart readers to gain further insight into the trading that is occurring. There are tons of different indicators, but even a basic understanding of the popular ones will be a big help.
To learn more about charts, check out our Strategy Page on Technical Analysis. By knowing the basics of charting, or 'technical analysis', you will be able to narrow down your scan by another factor. Then you can focus on the 'fundamentals' of the stock, to find undervalued stocks.
What are 'fundamentals'?
-Fundamentals can include a company's financial reports, as well as non-financial information such as growth estimates of the demand for sold products and competing products. Investors will also look into new regulations or demographic changes, and economy-wide changes.
When examining financial reports investors will look for improvements in earnings per share, top line revenue, reduction of expenses, cash on hand, and several other variables. The disadvantage with many penny stocks, pink sheets being the worst, is that financial reports may not even be published by the company. Also, even if they are, unless they are audited by a legitimate third party you are taking they company's word as to their accuracy. To learn more about finding and evaluating financial statements, please read this article.
What's Next?
Once you have filtered down to the stocks with the best fundamental and technical analysis results, you will want to do one last investigation to determine the 'share structure'.
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