Where The Volatility Is, aka 5 Potential PennyStocking Plays

Tags: Breakdowns, Breakouts, DVD, Patterns To Buy, Patterns To Short, Potential Plays

Sten Corp. (STEN) is the latest microcrapper to go exponential. It’s a thinly traded, low float debt laden ($9mil) $10-$15mil company (depending on whether the last price was at the bid or the ask!) up on “strong earnings”. Who really knows what’s going on with the company’s business—with companies this small, one little sketchy deal could be the turning point. I’ll look to short if it spikes again $2+ in 10 minutes like it did this morning. Who knows if I can even find shares to short.

Valence Technology (VLNC) is another PennyStocking runner that makes me wish I was also good at buying on the way up, instead of just shorting on the way down. Oh well, today was a big turning point in the chart, but the stock moves so slowly, I doubt I’ll short since it’ll tie up my cash for too many days all to possibly go down another 50 cents.

Another strong stock with a big down day today, Stillwater Mining (SWC) has had a very VLNC-type gradual run-up. It bounced off its intraday lows a bit, so I’ll look to short if and when it takes those out, right at $20, a nice big fat round number, a likely spot for naïve investors who’ve been taught to be disciplined with their stop losses. Take out $20 and watch it go to $19.50- $19 or maybe even lower within minutes/hours.

The Finish Line (FINL) has some settlement/merger termination, I don’t know and I don’t care—the chart isn’t interesting enough for me to research it further. Looks like a nice bottom put in and it’s not up enough to start shorting…

And last, but certainly least—business, ethics and probable long-term-value-wise—we’ve got everybody’s favorite pump du 2008, Converted Organics (COIN). Another “guru” bought today, just as the first “guru” lowered his position due to a rise in price caused by the first “guru’s” own mention of his position in Vince McBarron’s reality-newspaper (Vince McMahon in the sense that Barrons is as useless / entertaining as the WWF, reality in the sense that it’s staged as a reality TV show)(and for you wannabe “gurus” out there, you gotta love selling into your own pump, even if you probly will go to hell–isn’t that right Garty? Yes, you should be ashamed of yourself for pumping a $60 million company in an article in which the smallest other stock was $900 million).Even though I am firmly against this company, I bought and profited yesterday—remember just focus on the charts—and ‘twas a good thing I sold before my meeting today because just as I suspected, there was a morning spike followed by a nasty $1.50 intraday dump. I’d never hold this stock if I wasn’t watching every trade because it is one slippery sucka. Buuuuuuuut it did impress me by rebounding and finishing higher, doubly confirming this weird ass breakout. Pumpers, suckers, hypersters and “gurus” united against the rational shorts, this thing might have the ingredients needed to take it over $20—and god forbid $25, 30—if they can put out some more fluffy PRs and squeeze those early short sellers! (Hate these companies as if they’re your worst enemies in the world—they probly are—but def. play this game because there’s nothing else like it.)

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