Biotech Penny Stock

I previous gave Viking Systems Inc. VKNG a penny stocks penny stocks rating of 1, our highest and most favorable rating.  VKNG is not the typical penny stock in that it trades in the .30 to .40 cent range, but does it really matter what price a penny stock is if the longer term price chart setup still says there are potentially huge gains to be had ?

To me it makes no difference.  Some would probably only like to identify .005 to .10 cent penny stocks trading on the pink sheets or OTC BB.  Surely there are plenty of setups in that space with LBSR being a recent outstanding example of one.

But there are also a huge number of low priced stocks that START from the .20 cent range that can still do amazing upside runs especially if the longer term chart is very favorable.  VKNG is an OTC BB stock that actually has the potential to make some serious money if management can execute and position their 3D HD minimally invasive surgical system to eager buyers.  The price range for their product is near $100,000 each and so you can see how just a few sales can start to add to the bottom line.  The product launch is early October 2010, and the then the last quarter of this year.  Basically this company is transitioning from a development stage level to ‘real company’ level if they line their ducks up correctly.

I feel strongly that the long term penny stock price chart of VKNG is as attractive or even more attractive than the price chart of LBSR.  They are similar in that they both have good bases and large tradeable voids on the left side of the chart.  Stocks that make the biggest runs often times have large tradeable voids on the left side of the chart after having formed long bases.

VKNG today did a huge surge on big volume today. It was a gap opening and a spike high that is confirming the recent uptrend.  I feel that VKNG will trade higher into the end of the year as a longer term position type trade.  I already did a write up over at BestOnlineTrades and you are welcome to read that and see the weekly price chart which looks outstanding to me from a bullish viewpoint.

VKNG is not a good entry right now. I plan to accumulate on any dips in the weeks ahead, but I am unsure at this point whether or not the large opening gap will be filled or not.  I suspect it will in the weeks ahead which would create an ideal entry point.  Buying on a spike high is usually never a good idea.  Usually the stock calms down and settles into a range before the next leg up.

Because VKNG has a low float it tends to trade in the form of spike highs and then extended bases. It is a peculiar trading pattern and takes a little getting used to.

I see potential for VKNG to get above 1.00 range and even into the 3 and 7 dollar range within a 1 to 1.5 year time frame.

This post is just a quick heads up that VKNG or Viking Systems Inc moved above what I consider to be very important resistance at .28  I believe this ‘mature’ penny stock is slowly starting to build trend strength for a stage 2 advance that should eventually take it back up to $1.00 range again.  In the near term the .28 level would ideally hold up as new support.

It will probably take a good amount of time to get up there again, but the first key date remains the early October period as I indicated in my previous post on biotech equipment company.

VKNG can have a somewhat spotty trading style but it is important to keep the larger chart structure in mind which is a huge sign of strength from .005 to $1 range, then a long saucer bottom type formation of 3/4 of a year in length.

The best setups are those that evolve from very large patterns and show clues and signs of strength within.  I can name you plenty of penny stocks that move big every day but which ones have some real ‘meat’ behind them ?  That consideration is one of the most important ones to consider in this volatile sector.

The VKNG setup is quite rare in my opinion but it will probably take a good amount of patience to see it play out fully.

The volume was robust today but still not of the level I would expect to see for the start of a mega move.  Keep in mind that the previous run of .005 to $1 only took about 15 trading days.

We are still almost 2 full months away from early October and also still in the low volume trading month of August.  So I suspect there will still be some games being played for a while in this stock.  But September 2010 should be a much different story.

CytoSorbents Corporation CTSO may be about to break out from a symmetrical triangle formation.  I thought it was worth a short mention.  CytoSorbents Corporation trades on the OTC BB exchange (this is usually a positive point I sometimes give weight to as I consider stocks trading on the OTC BB of generally higher stature then those that trade on the pinksheet exchanges) and appears to be a biotech penny stock that has a blood purification technology.

I happened to have it on my watch list and have been eyeing it now and then but noticed today that it appears to be as about compressed as it will ever be right into the apex of a somewhat large 1 month symmetrical triangle formation.

It looks like north of .095 is where CTSO needs to be to get a run going.  The symmetrical triangle has possible target implication of about .12 which would be about 20% from here.

The risk is that the price of CTSO has travelled all the way into the apex of the symmetrical triangle which makes it less reliable.

There has also been somewhat of a volume surge in this penny stock during the last 4 days but price has barely moved.

This stock has shown that it has the ability to move a little bit in the past.  It went from .06 cents to .40 cents in 2009 after a previous long consolidation.

Presently the stock has been trading in a long down trending channel and the apex of this triangle meets pretty close to where the down trending channel line sits.

Finally I should say that I have noticed in recent days that many penny stocks are starting to come alive.  Perhaps it has to do with the broad market speculative recovery from its mini bear market, or perhaps it has to do with penny stock investors anticipating the beginning of penny stock trading season.