Monday Jan. 25 Premarket Analysis (Penny Stock Alert)
Today in the Stock Market
Dear Fellow Traders,
For the second time in as many days the Dow Jones Industrial Average dropped over 200 points. Market participants are still trying to digest the proposed changes to the banking industry, which was announced by U.S. President Barack Obama Thursday morning. Investors and traders are worried that the changes in how much risk banks can take will limit their ability to make money and could put any financial recovery in jeopardy. On Friday the DJIA broke through all recent major support levels and closed at three month low. The market ended the week at 10,172.98. 10,000 could be a psychological support level in the short term but we can’t rule out a test of the November low of 9,647.06. The earnings season, which has been mixed at best so far, has not provided any support for prices but it is still early so any good news might help revive sagging optimism.
It was not a pretty picture for the tech sector. The NASDAQ also sold off sharply for the third straight session. QQQQ, the ETF of the NASDAQ composite lost $1.33 on Friday to end the day at $44.16. Friday was the worst of the three-day sell-off. However the news isn’t all that bad. The ETF did find some support at $44. I don’t know how strong this level is the November lows around $43 might be a strong support level and one we might eventually test.
LET ME BRING YOU SOME POSITIVE : There is always a Bull Market somewhere in the Penny Stock World. We only need to find them…and i will make sure i help you with that.
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It was also not a good day for gold price. The concerns over the banking sector are also creating some pessimism in the commodities market. If the banks have to limit the amount of risk they can take, they might not be able to speculate as much in commodities like gold and oil. However I do not think the gold rush is over. We knew it was going to be a choppy ride but this volatility creates opportunities for investors and that is what we are seeing. On Friday, GLD, the biggest gold ETF, hit a low of $106.01 and bounced to a high of $107.68 and closed in positive territory at $107.17. Anytime gold prices dip we will see some strong buying. However savvy investors are not going to jump in too soon. They are going to wait for rock bottom prices. I think we might expect a dip towards the November lows of $100.65.
Look at this longer term chart and you can see we are at a critical point on the uptrend for GLD, we could poke this area and come back up while not affecting the uptrend…
**On a side note about gold, I want to mention that the Fed will announce its interest rate decision on Wednesday. It is high unlikely they will make any changes but it should cause some discussions about the U.S. dollar. Any weakness in the U.S. dollar will be positive for gold prices.**
The first stock I want to mention is our gold pick AGCZ. The stock had a relatively quiet day on Friday and ended the week at $0.305. I just want to point out that the stock continues to perform better than the gold market. I think we could see some consolidation at around this level as investors prepare for another big run in gold prices.
BWIH is our MONDAY PICK and you can see that it has a nice explosive chart. Monday and the next few days should make this stock a very good trade for us.
RVBF’s positive close on Friday could attract more buyers. Last week the stock has held support at $0.07 and could be ready for another move higher after ended the week at 0.079. On Friday in intra-day trading the stock hit a low of $0.061, which appeared to be a strong buy signal for many investors and traders. I continue to watch this stock closely because it is only a matter of time before it goes back to $0.15 and perhaps finally breakout…
BYSD remains a stock with a lot of potential. Friday was an extremely volatile day for the stock. Intra-day the price broke below the 20-day moving average of $0.30, which caused a flood of buying. The stock ended the day near the top of the Bar. It pulled back from the earlier move of friday 2 weeks ago. But now it looks poised to go revisit $0,60 and more.
HSCO, although thinly traded, is showing very good signs of strength. This stock also touched its 20-day moving average, of $1.15 which was a strong buy signal. The stock ended the week at $1.26.
Another stock with lower liquidity I am watching is GETG. On Friday it closed above a strong resistance point of $0.40. it was also the highest close in a month. If volume improves on this stock we could see it run to at least $0.50 or even $0.60 very quickly. I like the fact volume increased on friday. Ideally would be a big push with big volume increase…
The last stock I want to mention is FLX, a Canadian stock on the TSX Venture list. There is a lot of potential with this company and we are expecting it to be a longer term investment (6 to 8 months). The stock appears to be consolidating a bit, which is not surprising. It had some major moves on Wednesday and Thursday. FLX is holding most of its gains and ended the week at $0.27, which we think is a very good buying opportunity.
Have a Great Trading Day!
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