EESO Enzyme Environmental Solutions was a superb penny stock play

I have been trading penny stocks for a number of years now and quite a few sub penny stocks as well. So the question comes up many times, “ How on earth do you spot big penny stock moves BEFORE they actually happen? The hardest part of trading is trying to catch big moves before they happen and then go along for the ride. The other hard part is staying on for the ride until its maturity instead of jumping out too early. Now don’t get me wrong, there is absolutely nothing wrong with taking a profit in penny stock land, but in this business it certainly does not hurt to maximize profits considering how difficult it is to keep them over the long term.

If we look at the chart of EESO enzyme Environmental Solutions we can clearly see that way back in April of 2008 there was a huge move that saw EESO skyrocket. Then this sub penny stock went into a long selloff that eventually bottomed in December of 2008. The reason why I brought up the move that occurred in April of 2008 is that I usually like to see penny stocks already show me based on their past history that they are able to move. It is great to see a previous sign of strength in a penny stock because it shows you what it is capable off and that it might do it again. Plus it gives you a frame of reference with which to gauge possible future action.

Anyway after this long sell off from that high we see that the EESO penny stock based out for over 6 months! These basing periods are extremely important in penny stocks and they can reveal all sorts of valuable clues for future price action!!! This is a very important point and is worth repeating many times. The more analysis you do in the basing out period the more you stand a chance of identifying a real winner as opposed to a complete dud.

The clever observer would have studied this basing pattern on a log chart and noticed that there was accumulation going on. More importantly one can identify a very valuable price chart pattern on this sub penny stock. A head and shoulders bottom formation! You can clearly see this pattern as a left shoulder, then a head in the middle and then the right shoulder. The neckline has an upward slope to it which gives it an extra bullish indication.

As price began to advance above the neckline you could see the increasing volume and then the breakout volume. The pattern was then confirmed and thereafter we say an absolutely HUGE move!

I was not fortunate enough to have gotten any of this penny stock EESO before the big move. To those that did, congrats. This was a superb play and had some outstanding signals before the move. It is crucial to look at penny stocks on log based charts other wise you would not have been able to identify the head and shoulders bottom formation.

But what about holding on for the duration of the breakout? The clue that you need to hold for a while on the breakout was the LENGTH of the head and shoulders bottom formation. We had 6 months of sideways CAUSE. That kind of cause is what makes for an extended breakout type run. So we had some perfect ingredients this penny stock.

Now if you see a similar pattern forming like the one above, PLEASE DO let me know about it! I will examine it closely and see if I give it a green light!