gold penny stock - tag category postings

KATX or Kat Exploration looks like a nicely performing stock chart.  It has had an unbelievable run since .005 and amazingly could possible run even higher as long as key support levels are not violated.

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…

You know I don’t post on this site that often.  I hope to change that at some point.  But what I have found over time is that good penny stock setups do not occur that often.  So for me to post a penny stock a day on this site would most certainly be a disservice to all.

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.

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The penny stock Placer Gold Corp (PGCR) which trades on the pinksheets forms a chart that is worth studying in my opinion.  The chart you see above (click on it to make it full size) is a longer term 2 year daily price chart of PGCR. 

It is worth studying because in my opinion there are some well defined parameters that make for clear cost benefit analysis.  Many penny stock charts that I look at are not so clear.  Typically there is a lot of congestion, noise, lack of price data, and just general confusion in the price chart. Or the price movement has wide swings all over the place and it is difficult to define clear trends or parameters that are worth acting on.

Reason 1

But with PGCR I want to tell you about a few important observations I have made.  For starters, I see long term support at the .002 level.  The .002 level is a significant level and a level that PGCR must hold in order for me to remain open to bullish possibilities.

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I did a post a while back about UNCO and was exploring the possibility that UNCO may be coming into a buy point.

Well now we have some hindsight and clearly it can be said that UNCO never activated a REAL buy point as a signal to go long and stay long.

Why am I mentioning this?  Because I was browsing quite a few message boards and all along this decline it seemed there were quite a few that were jumping in UNCO during this waterfall like decline.  The chart to the left does not show most current prices.  But right now as I write this UNCO is trading near .008 and has gone sub penny again.  The decline has clearly been relentless since the very large sign of strength rallies we saw in late May.

So What is the Lesson here if any?

The ‘lesson’ if you will is that UNCO NEVER clearly activated a buy point during this long retracement phase.  A buy point would have been a price closing with good volume above that pink colored down trendline.  But UNCO was never able to accomplish that and gave no reason for traders to go long.  I am calling this a ‘lesson’ because what I have found is that even in pinksheet and otcbb penny stocks, one can still manage risk and use buy triggers like you would on any other type of stock.

It is a false myth that technical analysis does not work on OTCBB and pinksheet penny stocks. I disagree completely.  That is not to say that applying technical analysis can be somewhat challenging on these types of stocks sometimes.  It can be.  Sometimes the charts are very spotty in terms of volume and the signals can be very hard to read without careful enough analysis.

If UNCO really was to be a strong momentum stock then around June 8th to 15th it should have held more sideways price action and accomplished a breakout above the downtrend resistance line. But it did not do that, so it was time to look elsewhere.

These stocks that do these slow tiny declines day after day can be very deceiving.  They seem to call out to us to buy them, and their slow daily decline does not cause too much alarm.  But they are still dangerous and again, they need to show us a CONFIDENT signal (ie. breaking out above the pink down trendline) before they warrant taking any kind of trading risk for a long position.

Unico Mining is an OTC BB penny stock that in late May had quite a substantial rally. It was a very powerful rally and I would be so bold as to call that rally a huge sign of strength.  That is what price the nature of the price movement is telling me and it cannot be ignored.

On the popular message boards there is some talk about how this company is a total scam and that the management has time and time again ‘duped’ investors with a dog and pony show only to come up empty with any real results. According to these burned investors, Unico goes through this cycle of pumping up a stock maybe doing some insider buying and then not delivering anything of substantial value in the way of gold production or real concrete progress on their deer trail mine.

If I had a penny for every time I heard the story about how such and such penny stock is a scam, then I would be a very …… (you fill in the blank).

Look, I just do not know if UNCO is just another penny gold mining company that is big on promises but short on results.  That is, I do not know from the fundamental side if that is the case.

But what I do know from the UNCO charting side is that right now we have a fairly good scenario whereby the price of UNCO is at a key decision point and traders and investors have to decide if we have the real deal here or just smoke and mirrors.

The chart is the only thing that matters to me here. I cannot worry about all the other gossip about whether or not they are doing legit business practices and whether or not they will start producing gold in July 2009.

The price chart as you can see in the chart above is at a key juncture and I am going to be watching it very closely tomorrow morning.

If UNCO by the end of the day tomorrow or the other two days of this week is able to get a closing price above that white down trend line shown in the chart above then it could trigger an elliott wave 3 up or new rally in this stock.

On the other hand, if UNCO is not able to achieve that and breaks below .015, then it would invalidate the bullish case, at least temporarily (it could be a false downside shakeout) and open the door to more weakness in price.

So lets let the price decide here what the verdict is. I will be watching this one closely tomorrow and the rest of this week to see if we have any potential here.