If you look at the chart to the left which shows GRDO on the top portion of the chart and BEHL on the bottom part of the chart there is a tendency towards a general pattern similarity.

I have drawn the red arrows indicating some of the major general moves on these two penny stocks.  In each case we did see at first a nice rally of about 1 month and a half in duration which then peaked and led to a slow and extended selloff.

But then new demand came in then price was able to rally back to the top of the trading range in BEHL where it eventually led to a big breakout as was seen today.  So in essence what we had in BEHL was a first price attempt at the top of the range and then two more attempts and a final successful breakout.

The pattern in GRDO is similar in the sense that now we are near the top of the range again and trading sideways similar to the way BEHL did just before it broke out.

The overall theme here is that if price fails to take out the previous lows, then it will turn around and attempt to take out the previous highs.  We could be near that stage now with GRDO.

Of course all of this could be invalidated if price does not remain constructive in GRDO the next couple of weeks.

GRDO happens to be in the business of identity theft protection.  Clearly this is a huge potential market and also judging from the success of LifeLock a very profitable one.  LifeLock is basically an insurance company, and I suspect a very cash rich business.  I think lifelock is growing at about 25% per month and does north of 100 million in revenues per year.

So clearly we have a very big opportunity here. It is that kind of ‘pie in the sky’ potential that tends to light a fire under some of these penny stocks sometimes.  Lets see if GRDO can build some more momentum from this new identity theft biz wave.