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.

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.

One day’s action certainly does not guarantee an upside move will happen going forward.  I am just saying that preliminary indications are that this could be the case.  Patience and diligence is necessary to observe how KAT Exploration Inc behaves in the days ahead.

The overall structure of this penny stock chart is quite constructive because it is exhibiting a solid ‘stair step’ pattern and so far at least continuing to hold key support levels.

I am giving KATX a penny stock rating of 2 for now but I will probably upgrade it to a 1 rating if KATX can start showing a sign of strength higher.

If however KATX fails in getting an upside move going soon, then the technical picture and rating would drop considerably.

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.

I certainly would not expect as big a run as it had from the .004 lows in 2009.  But can VKNG get a 100% move going?  Probably yes.  But again it must hold the .25 range this week and maybe build a symmetrical triangle.

I am a bit surprised that since I started the penny stock rating system that again I am giving this one a rating of 2.  Perhaps this is somewhat unusual, time will tell.  But 2 it is.

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.

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.

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.

Anyway to get back to the point I was making earlier.  I will try to cover more penny stocks here in the future.  But I must tell you that in general I really do not like to talk about penny stocks just for the sake of throwing a few symbols out at you. It just simply is not my style!

I am the Senior Citizen of Penny Stocks!

I am kidding.  Well sort of.  What  mean is that I already know how extremely dangerous penny stocks are.  Most penny stocks are junk.  I am sorry to say it, but it is true.  You truly need a fabulous combination of criteria all coming together at once to make for a great penny stock play.

That is why I am referring to myself as the senior citizen of penny stocks because I would much rather try to find a small handful of penny stocks PER YEAR instead of 1000 of them per year. 

Why?

Because honestly most penny stock plays do not work out as I have already mentioned.

But imagine for a moment if we could somehow identify the few penny stocks that have real mega runs on an annual basis.

Lets say we are able to fine ONLY 3 penny stocks that have mega runs on an annual basis.  By mega run I mean a penny stock that is able to deliver 300% gains or better.

So, assuming you start with $5000 and invest in in penny stock number one that gains 300% or more you would then have $20,000.

Then assuming all proceeds are plowed back into the next winning penny stock of 300% gains or more you would then have $80,000.

Then, lets say you roll the dice again and find another penny stock that delivers 300% or more and put all $80,000 at risk.  You would end up with $320,000 on just 3 penny stock trades!

A few footnotes…

Most other traders will tell you that you are absolutely insane to even consider plowing ALL future proceeds into the next potential penny stock winner.  And I do in general agree with this point because you are putting too much at risk and can easily get blown out.

So my whole point of bringing this up is simply to make the point of how important it is to try to find QUALITY in penny stock land versus QUANITY.

QUANTITY to me in penny stock lands sucks!  I have to be honest about it.

The way to go about finding penny stock quality is something I will try to go about pointing out here in future posts here at penny stocks penny stocks dot com.

By the way I don’t claim to be the supreme expert in penny stocks and that everything I find turns to gold.  But I do claim to have a decent amount of experience in this sector and know how to read charts pretty well and identify the difference between a garbage penny stock and a potential true winner.

It is a constant learning process and we are all in this together.  There are some secrets, but a lot of picking the best winners is simple common sense believe it or not.

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…

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.

I don’t claim to be able to always pick the most perfect penny stock winners on any given day week or month, but I do claim to have a good ability to really FILTER out the junk setups from the true pearls.

Regardless, it is a constant learning process comparing past moves, time frames, chart patterns, volume, overall price behavior, fundamental backdrop and a bunch of other factors all combined into one.

Sometimes you will find a certain sector of penny stocks doing a lot better than other sectors for a 1 to 3 month period of time.  This can be due to many different reasons but is usually related to how hot things are in the more mainstream sectors of the stock market.

Sometimes we have seen big cap, and mid cap biotech stocks extremely strong on the major exchanges.  That type of action can lead to a biotech penny stock surge.  Another example is oil and gold.  When the price of oil was zooming up to $150, it created a feverish pitch for many oil stocks and then eventually oil penny stocks.

But now we have a new fever developing and it is called gold fever.  The gold price is moving from orderly price advance to parabolic advance.  The mainstream gold stocks are JUST STARTING their moves.

But still, even now we are already seeing penny gold stocks get some running legs.  Recently we saw BRYN and KATX do some huge huge moves up.

But now CVRG seems to want to get a run going as well.  They just came out with a PR afterhours on 11/18/2009.  The structure of the chart is quite promising because it has saucer bottom possible formation and a previous super spike high of .445 cents.  That swing high was on blowout volume and it is wide open because it was never tested.  It could mean a run back up to that level by end of this year or early next year.

It is very hard to predict how far or strong any penny stock will run.  PGCR had a blowout type run north of .02 and the run basically only last a few days.  But I would say that the penny stock runs that start slow and orderly and build gradual momentum have a much better chance of a more sustained run and higher run.  This may be the case with CVRG and especially with a cooperating gold price into the end of the year.

My forecast for the gold price is for 6 to 9 months of price appreciation that could put it in the 1400 to 1800 range.  We are only roughly 3 months into the gold price advance so far, so I think we have a good 4 to 6 months more ahead.  The current price advance in gold is a massive upside breakout from some much much larger patterns and that is why I think those that do not focus on the larger patterns will be confused as to how gold can sustain such a long and persistent run in the months ahead.

Anyway a 38% fibonnaci retracement from the .445 highs to the recent lows would set a target price of .18.   So it would seem that could be a minimum target. 

Again, I like the long saucer type bottom formation.  We also have a weekly MACD cross that just occurred.  On balance volume and accumulation distribution both look very bullish to me.  The 50 day moving average is making a stance for a golden crossover with the 200 day perhaps within a week or two.

So all the above points mentioned tell me a new mini bull market is starting in CVRG…

A trader friend of mine pointed out INAR to me the other day.  After he first mentioned it I looked at it only briefly and concluded that it needed to do some more work after the initial early August breakout type move on huge volume.   But now I am looking at it a bit closer and this penny stock might have some potential.

It appears clear from looking at the penny stock chart of INAR that the big spike rally in mid May was preliminary demand.  Then we saw a sell off and a retest of the .001 level which INAR was completed successfully.  Price was able to hold the double bottom without breaking down below.

Now we are seeing another attempt at a rally on huge volume.  After the volume and price spike after a week ago INAR has settled down into a small sideways  trading range.

I would really like to see INAR trade and hold sideways for a bit longer without breaking down much at all.  If it can do that then it may have a decent shot back up towards resistance at .008 which I consider to be an ideal exit point.

The fact that INAR failed to break out the lows of .001 on the double bottom retest implies to me now that it wants to take a shot at taking out the .008 range just like a tiger who tries to get out of the right side of his cage, but can’t , then oscillates to the left side of the cage to see if it can get out that way.

Penny stock INAR clearly broke through the blue down trend line on substantial volume and a confirmed price break and sign of strength.

So now it is up to INAR to prove itself and hold sideways as horizontally as possible so it can work off the overbought condition and get some legs for a run at .008.

You can click on the chart of PGCR above to see it full size (note please ignore the x axis monthly dates because they are incorrect, the price is correct but the dates are wrong. It is the only way I could get the data in my charting program).  I still like the way PGCR is trading so far.  It continues to trade sideways now near the longer term triple bottom support area. 

I continue to believe that PGCR could be close to a spike rally north.  If I am wrong then I think the best alternative is to see PGCR trade sideways for a longer period of time. The 13 day moving average has still not crossed above the 50 day moving average but it is awfully close.  Volume has really dried up as of late, but is that surprising in August? 

If PGCR is able to keep trading sideways without breaking below .002 then to me it would be a bullish longer term development because the stock could be building a big base and longer term cause for the eventual move up.  But it is imperative that PGCR is able to hold .002 .  Perhaps the best shot PGCR has for a repeat type super spike rally is the October to January 2009 time frame.  Rest assured I will post here when I see important new developments.

I have said before that I would love to see the gold price spike up and break 1000 sometime in the next month.  In my opinion it would go a long way towards support PGCR’s longer term potentially bullish setup.

PGCR may get an upward spike at any time however and some of the indicators that I follow are telling me that PGCR could spike up as soon as this week.  But please do not take that prediction to the bank. 

PGCR needs to get above .0045 before I can say with more clarity that it has truly finished bottoming.

Placer gold has the clear potential to spike to .01 to .03 cents in a matter of days in my opinion.  But a spike like that may need to be triggered by news which has not been out since June 9th, 2009.

I still feel we are dealing with a powerful setup, but the main risk is that PGCR stays flat for many many months and never really gets a rally going.

With a little luck we will get the gold price to start cooperating so that a public obsession with gold stocks can start .