If you’ve been trading for any time at all, you know the alure of trading penny stocks.  Indeed, the skilled trader CAN make a lot of money when he/she gets in at the right time.  But the article below shows just how dangerous this approach can be:

Sep 26, 2011 (SmarTrend(R) Spotlight via COMTEX) — Uranium Resources (NASDAQ:URRE) is one of today’s worst performing penny stocks, down 4.7% to $0.72 on 0.2x average daily volume. Approximately 238,000 shares have traded hands today vs. 30-day average volume of 1.3 million shares.

High volume often signals a change in trends. Shares of Uranium Resources are currently trading below their 50-day moving average (MA) of $1.23 and below their 200-day MA of $2.05.

SmarTrend scans for speculative penny stocks under $1 for reversals in trends. A large price movement may signal continuation or reversal of a trend.

Uranium Resources is in SmarTrend’s Industrial Metals & Minerals industry and this industry is currently in a Downtrend. An industry trend that matches the stock’s trend helps to add conviction to the stock’s Downtrend and price prediction.

SmarTrend currently has shares of Uranium Resources in a Downtrend and issued the Downtrend alert on May 23, 2011 at $1.55. The stock has fallen 51.1% since the Downtrend alert was issued.

Write to Chip Brian at cbrian@mysmartrend.com

Read original article here

As always, regardless of whether you are trading penny stocks or ‘real’ stocks, have a real plan and size your positions appropriately!



Monday, September 26th, 2011 News, Stock Trading

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