There is an opening gap in the LBSR price chart.  If we are correct that LBSR is about to do a downward retracement from recent highs, then it would not be out of the question for LBSR to at least do an intra day price move that fills the gap at .038.

We have placed some buy orders ourselves for more accumulation of LBSR at .039.  That level is also consistent with a move that would help to better define the recent uptrend level of the LBSR penny stock price chart.

See the penny stock chart below for more clarity.  The red horizontal dotted line represents the gap level and the two blue up trend lines represent possible uptrend ‘foot support’ if you will where price can find new strong bids again to continue this uptrend.

Here at penny stocks penny stocks we go into more depth and detail on penny stock charts than the top 100 penny stock websites combined.  Penny stock charts have some unique characteristics than other ‘regular’ stock price charts but the principle of technical and chart analysis remains the same.

A lot of times the three white soldiers candlestick pattern which is a very bullish signal is still usually retraced so price can catch its breath and build cause for a new move higher.  The same would be true if you see the three black crows candle stick pattern from a price top.  Usually there is a retracement back topside to help define the new move.

If we do get a gap fill at .038 then it is likely to be a very sudden event that happens only on an intra day basis at which point buyers are likely to come in heavily to support this penny stock . . .

Sometimes the difference between a great penny stock that performs like a champ and one that is lackluster and weak is only 1/2 of a penny.  This appears to be the case for STRATTON HOLDINGS right now.

It must hold the .0049 level otherwise the uptrend line of the recent large swing trading range is at risk of breaking.  Anything under .0049 and STRATTON HOLDINGS goes into the recycle bin.  But if somehow, some way STHG can hold here and move higher the rest of this week it may have some life left in it.

With penny stocks one has to be extremely picky and critical of how they behave.  This is no love affair here.  Either a penny stock behaves to your criteria or you kick it right out your front door until it gets its act together again.

The red dotted trendline is the one I am referring to in the chart above.  Today we touched it but admittedly on light volume.  The MACD histogram continues to have downward momentum and shows no signs as of yet of any kind of buy reversal signal. . .

I think Liberty Star Uranium & Metals Corp momentum is drying up a little bit today and we may be due for a short term pullback.  Remember, no penny stock every goes up in a straight line.  It has had a nice strong advance that has been quite persistent since the breakout over .03.  It was a clear sign of strength.

But today at least at mid day volume does not seem to be coming in as strong and the relative strength index on LBSR hit a peak of 87 today well into the powerzone.  The MACD histogram appears to be showing a slight slowing of momentum as well.

So it would seem there are some ingredients for today being a short term top.  We may trade flat to only slightly higher the next 2 days and then possibly drop down to .04 to .045 range as a short term thrust down which will probably be bought quickly.

If we are right about LBSR entering a short correction here then it will most likely be very short lived (at least the worst of it may be) because of the inherent strength of the longer term chart.

It would be particularly short term bearish if Liberty Star Uranium & Metals Corp closes at .06 today because it would create a dragonfly reversal doji candlestick on this penny stock.  Also, we previously mentioned the topping tails of the last few days which is an indication of some supply coming into the stock.

So it would definitely not be the end of the world to get a little pull back in LBSR.  If we are correct about it starting within the next couple of days then the retracement should offer a healthy chance for this penny stock to consolidate and build new cause.

There is an outside chance that the current consolidation is only a pause and could lead to a quick new move higher above .07, but for now that seems like an unlikely outcome.

It is very tough to look too far ahead but if we get a dip to .04 then it could set the stage for another horizontal type trading range that builds cause for an eventual breakout move to a new plateau above .07.  

If you ever begin to start trading penny stocks try to remember this one very important rule.  Penny stock quality is much more important than penny stocks quantity.

There are a million penny stock sites out there (probably more) and maybe most of them focus on quantity.  We can understand the desire to have a lot of quantity because it makes it seem like there is a lot to choose from.  Certainly people want to have a lot to choose from in the penny stock universe and this is not necessarily a bad thing.  But it is only those finely tuned minds that are able to filter out the quality penny stocks from the quantity that stand a better chance at this game.

To be honest there is not that much quality out there in penny stock land.  One really has to search long and hard to find it and also recognize the simple fact that there are probably only a small handful of true quality penny stock setups in any given year.  It may be more than a handful actually.  Maybe it is about 10 to 20 true quality penny stock setups.

In our view, this should probably be the most important task that any potential penny stock investor should embark on.  Making the definite decision to only focus on finding the absolute number 1 rated penny stock setups instead of just the hottest recent big mover that seems like its should go up.

I have been trading penny stocks for about 10 years now off and on and I can tell you with zero doubt that it is extremely difficult to trade penny stocks with a consistent winning record year after year.  I don’t mean to sound discouraging, but in my view it is a simple truth.

So the question is how can one build up better odds over time and consistently win in the penny stock sector year after year ?

To me, this is the most important question one must ponder if they are looking to participate in this sector.  The penny stock sector can offer potentially enormous rewards if a proper strategy is developed to win in this sector.

It is the desire and definite chief aim of this penny stock site to attempt to come up with a long term winning penny stock trading strategy.

We do not claim to know all the rules or secrets but we do feel we have a keen eye towards what makes for the best penny stock setups.

The average penny stock can provide to traders 20 to 100% gains on a daily, weekly or multi week basis.  It is very easy to forget the power of compound gains when trading penny stocks.

Did you know that if you were to compound a starting capital of $500 at a 50% rate that it would grow to $1,108,418.91 after just 19 trades?  But this assumes that after each trade you would re invest your entire proceeds into the next trade which would expose oneself to the highest possible risk with each trade.  This is not advised but I point this compounding example to show how even 30% to 50% returns achieved consistently enough times can lead to massive wealth building.

But the issue is how do you find the penny stocks that are going to return 30 to 50% on a consistent basis?  The answer is that it depends on the penny stock price chart.  Either the penny stock has all the ‘right stuff’ in the chart or it doesn’t. 

We feel very strongly here at penny stocks penny stocks dot com that when we see a superb number 1 rated penny stock chart setup, it jumps out at us boldly and really makes a statement.

A problem that occurs is partly the result of their being so many penny stocks and so many potential setups. It can be easy to get suckered into the less than perfect setups and then suffer bad draw down and losses.

But think about this for a moment… Imagine if there was a penny stock trading strategy that on an annual basis tries to only find the number 1 rated penny stock setups a few times a year. Perhaps those setups would return 30 to 100% returns.  And then imagine if you could consistently achieve these returns year after year.  It goes without saying that if done successfully, a large amount of compounding of capital could be achieved.

But it is perhaps more easily said than actually done.  The ability to identify and participate in only the strongest possible penny stock setups on an annual basis is quite a challenge.  It requires the ability to scan through hundreds or thousands of penny stocks and then having the foresight to only participate in those setups that are deemed number 1 rated.

Probably the hardest part of such a strategy is resisting the temptation to jump into less than near perfect penny stock setups…

Well you now have an idea about our frame of mind here at penny stock penny stocks dot come…

Now lets get to work…

The following list is the penny stock scan for today.  These penny stocks are automatically scanned and are not rated by us and have not been reviewed.  They are just meant as a scan of the penny stock universe so as to see what is moving in the penny stock sector at prices below .10 cents.

Volume Spike Scan of 150% or more combined with Price Advance:

MACD Bullish Cross:

2 Day Bullish Movers:

Have a great weekend.  By the way I just noticed out of this list that TAON looks quite interesting as yet again another penny  mining stock.  I will have to study the chart for a while and see how it looks, but my first glance at it made me think it might look quite good…

The mining penny stock LBSR today moved into a consolidation stance and looks like it will finish with a doji indecision candlestick.  There was gain a semi large topping tail on the daily candlestick that somewhat mirrors the topping tail of yesterday as well.

Volume also dried up markedly today and is suggesting in the short term that momentum is starting to shift.

I am going to make a short term forecast for early next week but keep in mind that these short term forecasts can be very variable as far as specific timing.  I think we could go into a one or two day retracement early next week perhaps down to the .042 level as the low point and then some type of intra day reversal back topside again.

The reversal may be enough to get LBSR back up to .07 again which may then cause some new sellers to come in again.  If so, then it could cause a drift down back to .045 again for another retest and then an eventual new trend build higher.

The above forecast is very speculative.  But overall today I have to say that the action in LBSR is still very encouraging.  We have recently completed 3 white soldiers candlestick pattern which is a very strong indication of who is in control.  The fact that we sold off today should not be seen as extremely unusual.  In fact, given the fact that this is a mining penny stock it should be seen as a normal garden variety pull back today.

I am writing this update as of 2:48 PM eastern time on August 13, 2010 and so I cannot be sure exactly how we will close yet on LBSR.  If by some lucky chance LBSR closes near the top of the range today then it may hint that today’s doji candlestick was simply the half way point resting point.  If that is the case then we could trend higher very strongly early next week.  Still, the volume is lightening up today and so my bias is that we consolidate in the scenario I already outlined earlier in this post.

In our opinion, strength has to be the presumption with LBSR.  Any pullbacks should probably be seen as opportunities for accumulation, again in our opinion only.

I really do not have anything negative to say about LBSR as this point.  If the earlier scenario plays out then we should see .043 as the low sometime next week and then an upwards reaction from that level.  I am seeing signs that this penny stock is being accumulated consistently.

One thing I can almost guarantee you is the LBSR will once again move into another sideways type consolidation at a higher level.  This next consolidation will be the key for next price evolution.

I should say that it is also a definite positive for the mining sector in general to have the very seasonally strong month of September coming up.  That is about as good a scenario as one could ask for in terms of timing.  In addition the seasonally strong penny stock trading season also runs from September  to January time frame.  So in our view there should be plenty of room for more upside surprises in LBSR.

Lastly, you probably know by now that I rarely if ever discuss fundamentals here at penny stocks penny stocks dot com.  But I should say though that the fact that LBSR is working a deal with a more established mining company Northern Dynasty Minerals Ltd is an extremely positive sign from a fundamental standpoint.  Northern Dynasty Minerals Ltd current market cap is about 632 million dollars.  I do not ever recall since I began trading penny stocks, when a penny stock actually had a real tangible working relationship with a major mining company.  This fundamental fact makes this a unique situation.

There have been other penny stocks in the past that have had a lot of speculation of being associated with a much larger mining company, but that was only pipe dreams and speculation.   In this case it appears to be real and meaty enough that you can sink your teeth into it.

So yes, I focus on technical analysis of penny stocks here, but that does not mean that one should give some consideration to outside fundamental developments that may be ‘game changers’.  Most penny stocks don’t get good breaks like the one LBSR has right now.  Their potential massive resources in the ground, a rising gold and uranium price in September 2010, make for a possible perfect storm for this penny mining stock…

More developments to be posted as warranted…

The penny stock Stratton Holdings Inc may be once again coming near a reversal point.  I mentioned this penny stock before as one that seems to be fairly liquid and also constructive in that it seems to want to trade in a slow upward slanting trading range.

It has been a fascinating penny stock in that it has shown very clearly with reversal candlestick hammers its intention to trade back to the top of the wide swing trading range.

STHG appears to be forming a small reversal hammer again today and is trading in a downward slanting flag formation.  Volume is also contracting down within this formation.  I suspect that it may make a shot at the topside of this falling wedge and get another 1 to 3 day move topside before succumbing to overhead resistance again.

This penny stock just fascinates me for the simple reason that it trades with robust volume and has nice big ranges.  It is like a blue chip stock with big trading ranges and interesting valleys along the way.

Next week STHG may make another run to break overhead resistance.

This is one to keep an eye on because of its large penny stock swing trading range and seemingly clear reversal signals.

Still, there is always the risk that this penny stock will break down from the up trend line support in force since 7/7/2010.  STHG is sitting right now along this support line and it does need to get a topside reaction soon otherwise it will risk spending too much time near the support line of this swing trading range.

KAT Exploration, Inc which we first starting talking about here at penny stocks penny stocks dot com way back on March 9th, 2010 when it was at about .05 cents has since had a tremendous run up to an intraday high of .252 cents or a 404% move.

KAT Exploration, Inc is probably one of the most amazing penny mining stock runs we have ever seen.  It is bigger than the run in Sarissa Resources or Goldspring Inc.

The question now is whether or not KATX  can get another run going from its recent long consolidation which has essentially been sideways.

The stock appears to be trading in another massive falling wedge formation that looks somewhat similar to the two previous falling wedges that got KATX to where it is trading at right now.

I cannot predict whether or not KATX has enough fuel to blast higher out of this wedge, but I would say that it is imperative that KATX hold .12 support otherwise the whole mini bull market run may be over.  It simply must hold .12 support, no ifs and or buts.  That is simply how this business works.  You allow penny stocks some breathing room, but if they violate key levels then in our opinion one must run for the exits fast.

At this time I cannot say whether or not a gold price super spike higher in September time frame will help KATX. It may.  The seasonal month of September is an extremely strong month for mining stocks and the gold price.  It will be very interesting to see if KATX can break above this falling wedge formation and get a strong bid again.

I would be completely remiss if I did not mention the June 14th, 2010 price down candlestick that was on almost 20 million shares.  This huge down spike in both price weakness and volume is a potential cause for concern and should not be ignored in our opinion.  Relative to the price rise up to .25 cents, the down spike on 6/14 was on much greater volume and could be a warning that the demand supply relationship of this penny mining stock has changed.

In our view it makes the .12 area all the much more important as a KEY LEVEL that must hold in the days and weeks ahead.

Think of the gold price as ‘big daddy’ and the penny mining stocks as the little children of ‘big daddy’.  If the big daddy breaks out to a new all time high and powers higher creating a speculative frenzy, then the little children of big daddy a lot of the time get really excited as well.

My point is that the gold price can sometimes be important to adding speculative fuel to the mining penny stock sector.  The same could probably also be said of the uranium price.  If the uranium price were to blast higher to new all time highs it could light a tremendous fire under certain uranium penny mining stocks.

I remember many years ago there were two penny mining stocks that shot dramatically higher during the gold price super spike into 2006.  They were Franklin Mining and Roanoke Mines.  Franklin mining shot higher from .0009 to .15 and Roanoke Mines shot higher from .0001 to .15 cents all within a few months.  The amazing fact about the Roanoke Mines move was that this stock was not even a functioning penny mining stock company and was just trading on the pink sheets lingering around with no real operations.  That my friends is what a speculative frenzy in the gold price can do.

Having said that, I do not mean to say that any penny mining stock cannot get a good run going if the gold price just stays flat, goes sideways or even moves down.  Sometimes specific mining company events take precedent over everything else.

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