| An often used and successful strategy for attentive | | | | break through its 52-week ceiling the stock will |
| investors is to buy a penny stock that has sustained | | | | continue going up and establish a new 52-week high. |
| a high. Most penny stocks after reaching their | | | | You can profit from this anticipation by buying penny |
| 52-week high will experience a wave of selling. The | | | | stocks that have reached their high and maintained |
| wave of selling would no take place if investors | | | | their price. |
| believed that there was more to come and that | | | | By buying penny stocks in this manner you have the |
| soon the price would be even higher. Their | | | | potential of owning a stock that will be attracting |
| expectancy could be based on a deal that is being | | | | interest from all the investors who expect it to |
| worked on or on a contract that the company has | | | | establish a new 52-week high. The risk is that the |
| just received. | | | | selling might only be delayed and that it will start |
| A hot penny stock in this scenario will then establish | | | | once the stock is one or two cents above its annual |
| a new base at the high as investors hold their stock | | | | high. To minimize this risk, wait a few days before |
| and wait to see what happens next. If the company | | | | buying to see if it stabilizes. If the price starts |
| continues growing they will hold the stock and may | | | | declining after you buy it, it may be time to |
| very well add on to their positions. When the stock | | | | immediately sell and move on. Once the selling starts |
| crosses over its 52-week high other investors will | | | | the stock could easily retreat to anywhere between |
| notice and buy the stock. They will buy the stock | | | | its annual high or low. |
| based on the rationale that if the stock was able to | | | | |