Penny Stocks Penny Stocks

One Penny Stock and a Dream

KAT Exploration, Inc. is possibly setting up for a very important breakout above the recent trading range.  I was looking at KATX very critically over recent weeks and wanted to be sure that it would not break below 5.5 cents.  It has not broken this support and is an internal sign of strength.

The overall structure of KAT Exploration, Inc. is looking quite bullish and I am upgrading the penny stock rating on KATX to a 1 (our highest rating level). Why?

Well because KATX has now shown us that it is unwilling to break down below 5.5 cents and it wants to maintain the current strong longer term trading range and is now at the top of the trading range for the THIRD TIME.

Usually a stock or index will succeed on its third attempt at breakout out.  Usually, not always. But I like the recent three day move and I also like today’s intra day reversal.  The candlestick looks great.

It is also nice to see KATX performing so well given the recent overall market weakness and the general sloppy trading and weakness in the gold price.  This is a very good sign.

KAT Exploration, Inc meets most of the criteria I look for in a superb penny stock trading setup.  It reminds me of the setup that Sarissa Resources had over a year ago.

I like the fact that KATX has a lot of SIDEWAYS CAUSE and has not broken down.  KATX is a great example of the type of penny stock we like to identify here!  If you ever see a penny stock with a similar setup to this one please do tell us about it so we can share it with our readers!

If KATX is able to hold and maintain a full price candlestick above .092 (possibly next week ?) then it has a clear path to about .17 cents.  There is almost no resistance all the way up to that point and it could be reached in short order.

Certainly a huge gold price breakout would help things along as well, but for now KAT Exploration, Inc seems to be doing quite well on its own too.

According to bloomberg.com KATX currently has a market cap near the 37 million dollar range.  This is a bit of a concern as it become increasingly rare to see ANY penny stock trade above a 100 million dollar market cap.

Assuming KATX is able to successfully trade to the .17 range, then the next level of resistance is the .45 range. 

For KATX to get to .45 range it is going to have to once again form another sideways base of many months duration.

If things get wild enough in the gold market and the gold price is able to get a super spike going then I think it could be reasonable to see KATX eventually reach the above mentioned targets.  A lot of the next moves do depend on the gold price in my opinion!

You might notice that I have not even mentioned any fundamentals about this penny stock.  The only thing I need to know is that it is a gold stock and that the gold market so far is still in  bullish stance.  The chart itself right now is speaking enough to me that it is all I really need to know for now.

The strength of KAT Exploration stock in the last few days despite overall market weakness is a great example of how many times you will see penny stocks trade completely independent of other market indices.  It is almost unbelievable how they do it.  But in a certain sense they become safe havens to the rest of the market.  But for this to happen the stock must have some very strong hands, a very good story and some committed shareholders.

KAT Exploration, Inc the gold mining penny stock that has been range bound for quote some time now today had what I consider to be a possible key reversal for the stock near the .06 level.

KATX has been range bound for a while and what I am so far please to see is the the stock has NOT violated the .05 level on the downside.  This is very important and a key consideration for this penny stock in my opinion.

Why?

Because breaking down below .05 would show that sellers have enough strength to break the recent trading range and destroy the changes of a continuation uptrend.

Today was a key reversal in terms of the daily candlestick and could be a sign that KATX wants now to trade back to the top of the recent range which would be the .09 level.  That is the most important near term consideration for this penny stock.  If it can get to .09 again then it may have a chance for a successful breakout above the .09 level because usually stocks succeed on their breakout attempts with the third try.

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Viking Systems, Inc. was just mentioned to me on a stock message board and I casually checked it out and a few alarm bells went off in my head.

Occasionally I run into penny stocks that others mention just at random.  I casually take a look and most of the time they don’t get me that interested, but on a rare occasion they jump out at me.  Viking Systems, Inc. fits that description perfectly.

VKNG trades on the OTC BB and has a small trading float.  The stock also had a HUGE run in November of 2009 from a price point of .004 to 1 DOLLAR.  That is a price percentage gain of 25,000% or a 250 bagger. Unbelievable.

Recently VKNG made a huge 100% move with a nice large power candlestick almost resembling a MARIBUZU candlestick which shows that a possible new strong uptrend may begin.

It is consolidating right now and IF VKNG wants to trade higher from here then this week it really ought to hold .25 cents.  If it breaks below .25 this week then it may not be able to get a continuation run going.  But as long as it can bounce around between .25 and the recent highs I think VKNG may have a shot at another run higher soon.

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There may be a lot to like about Wanderport Corp. WDRP trades on the pinksheets and according to pinksheets.com:

WanderPort Corporation is a publicly traded company specializing in the development, marketing and distribution of Eco-Friendly Technology and solutions. The company’s main focus is the preservation of clean fresh water as well as the reduction and elimination of fossil fuel uses. WanderPort owns the global exclusive manufacturing and distribution rights to an Eco-Friendly Pulsar Tankless Water Heater Solution.

A lot of penny stocks these days seem to like the green energy sector.  So what does the chart say?

The chart of WDRP caught my eye because it has a roughly 2 year base and has had decent volume in the the last few months.  Liquidity does not seem to be too much of a problem with it right now.

In addition Wanderport Corp. is currently trading above its 50 day moving average, a good sign and also above its 200 day moving average, another good sign.  A golden cross occurred (50 day moving average crossing above 200 day moving average) near March 10th, 2010 and tells me that the bulls seem to have a shot at pushing this one higher.

The most recent daily candlestick on WDRP looks like a hanging man candlestick and could be a sign of another decline this week.  But if it can ignore that candlestick and move higher that would be quite a bullish event in my opinion.

Also the overall chart has a general tendency towards a large cup and handle pattern.  This stock could have measurement implications towards 6.5 cents.  This is only a rough estimation at this point.

The chart is also showing a general symmetrical triangle formation that is coiling up for a big move.

The volume contraction within the large triangle is consistent with this pattern and if a breakout does occur, it will be important to see a dramatic increase in volume out of this pattern.

The penny stock rating for this stock is 2.

From now on whenever I talk about a specific penny stock I will make a habit of giving it a specific rating.  These ratings are not scientific or system generated.  They are ratings based on my own personal judgment and criteria I have learned to use over the years.

Of course it goes without saying that just because I give a penny stock a certain rating does not mean it will perform exactly as the rating suggests.  The exact opposite may occur.  Again, this is my own personal judgment and I have been wrong plenty of times.

So why use penny stock ratings ?

I just think it helps me to quantify what I am looking at and helps as a point of reference if I ever want to check back from a historical context to see if I was correct or not.

The extreme swings and variability of penny stocks may make this ratings system somewhat irrelevant, but I am going to give it a shot anyway.

The ratings system will be from 1 to 5.

1. A rating of 1 means that the penny stock has most if not all the important factors I like to see in a penny stock that lead to a good future price move.  This is going to be an extremely rare rating because it means that we are dealing with an very good penny stock setup with good to very good probability.  Very good and highly probably penny stock setups are in my opinion quite rare.
2. This is second best.  The setup is good, but is lacking in some area that just does not make it to the top of the list. It may be one or several criteria that keep this penny stock from making it to the top of the list.
3. This is an average rating and right in the middle.  It means that my opinion of it is neutral and I don’t expect a decent move soon or even at all.  It might happen but it probably will not.  A 3 rating means indecision.
4. This is a ‘bad’ penny stock.  I don’t expect any good move soon or in the near future and I expect it will probably continue in a downtrend or be sloppy poor trading action.
5. This is the worst penny stock and is very questionable.  It probably has very poor liquidity and a very poor chart that should be avoided at all costs.

So there you have it.  The penny stocks penny stocks dot com rating system.  There may exist a certain contrarian element in this rating system as well because sometimes I have qualified certain penny stocks as having very bad looking chart, only to see them take off and turn into a super running penny stocks.

So again, this is my judgment and opinion only.  Another pair of eyes may see something entirely different and of course opinions are always welcome here.

I love penny stocks.  But it seems for whatever reason I have completely neglected this group of stocks over the past several months.  I have not completely neglected penny stocks in the sense that I have been dabbling in the more mainstream penny stocks between $1 and $5 on both the Nasdaq Composite index and the New York Stock exchange.

Given the huge market surge since March 6, of 2009 these days it is becoming harder and harder to find 1$ to $5 nasdaq or nyse stocks that are ripe for a nice move.

Of course the recent exception to the rule was ABK Ambac Financial Group, Inc. Ambac had an absolutely outstanding rally from the depths of the .60 cent range all the way up to a high of $3 and change that occurred through multiple gaps up.

The nice thing about ABK is that you have a very liquid stock and generally very high volatility.  The downside is that you have the potential for this stock to go bankrupt at any time.  I have been in stocks before that had a ‘possible bankruptcy’ press release and let me tell you it is not fun at all.  So ABK is probably best suited for day trading at this point to avoid one of those end of day or pre market PRs.

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KATX or Kat Exploration looks like a nicely performing stock chart.  It has had an unbelievable run since .005 and amazingly could possible run even higher as long as key support levels are not violated.

It is all too rare to see a penny stock perform in a clean fashion with a clear uptrend like some big board stocks.  And yet KATX seems to be doing just that.

The condition right now is for KATX to continue to get nice price reactions and support off of the .05 level.  If KATX can maintain its composure above .05 and then eventually get above .07 again, it could be ready for another big run.

It is also interesting that the gold price at this point still looks constructive.  As far as the GLD ETF I am waiting and looking for full price bar action above the 114 level for gold to get another massive up leg going.  It really needs to get above those levels for confirmation of new uptrend.

If that happens, then we could be setting up for another parabolic type move in the gold price and that could potentially help KATX to get another leg higher going.

But for now, first things first.  KATX must hold .05 and perhaps build a bit more sideways cause.  Lets see how well it behaves in the weeks ahead…

You know I don’t post on this site that often.  I hope to change that at some point.  But what I have found over time is that good penny stock setups do not occur that often.  So for me to post a penny stock a day on this site would most certainly be a disservice to all.

So I am not quite sure how I will go about posting new content on pennystockspennystocks dot com yet.  Perhaps I will post penny stocks that fall in the ‘watching category’ which will probably be about 99% of them and then once in a while I will post penny stocks that move into the ‘high alert’ category.

The fact is that most penny stocks and penny stocks setups are horrible.  But perhaps one tenth of a percent of the penny stocks out there at any given time are SUPERB setups.  And the superb setups do not come around that often.  Image if you could jump into just 4 or 5 total penny stock setups for the WHOLE YEAR and each of them were huge runners.  Wouldn’t you rather do that instead of throwing good money after 100’s of bad?

PGCR Placer gold corp which I previously profiled on this site some time ago was one of those superb setups.  It had a BEAUTIFUL technical analysis backdrop which I described clearly in those posts.  It was extremely powerful.  The best penny stock setups have clear parameters which make them superb candidates for big runs and sometimes sustained runs.

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