Navigating Thin Stocks

Navigating Thin Stocks

Navigating Thin Stocks 1024 546 Steven Dux

The market has changed so much in the last couple of months that it has led to a lot of market “experts” to recommend shorting stocks heavily.

The basis of

shorting a penny stock.

The choice for shorting a penny stock should never be based on the general macro market like the S&P 500. If you are not careful, stocks in even a down general market can hold their support levels and this is why evaluating the details of an individual stock, such a trades per day and multi-week breakouts, becomes highly important.

A great example is $ANTH when it was trading at $2.70-$2.80 because this becomes the perfect time to test the previous high. Nonetheless, a slight rise over the previous day’s high is not considered a breakout. The key here with this or any stocks is not a prediction but to respond to the movement.

This brings us to a similar stock, $ZN, which is on a multi-month breakout, however, we can see the stock consistently peak at levels of $4.50 during this time, we learn that this is when the reaction at this price level counts. Our goal is not to predict the price but to proceed when this becomes a followable trend.

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