I just wanted to touch base with subscribers and readers on something that could be interesting next week. Last week we saw Lithium Exploration Group (LEXG:OB) make a run that a penny stock trader will be talking about for years, and now I want to touch on the psychology of what sometimes happens after those runs.
LEXG created massive gains for those who were early, and even for some who were a little late, but Friday told us a different story for those who were a in very late and didn’t sell. Between profit taking and short selling, shares of LEXG were smashed. Many saw it coming, but didn’t know exactly when the fall would happen. However, massive runs in individual penny stocks, cause those who are coming off a profitable trade to search for “the next one”.
So this week we are going to put a few names out in front of you to add to your penny stock list. Our reasoning is simple, there should be a rotation of the LEXG profits moving somewhere. Which stock will it be ? I have no idea, but I will be sure to provide you with some possibilities.
Obscene Jeans (OBJE.OB) is the first that I will touch on. OBJE is basically a retail/fashion stock that is attempting to break into the higher priced jean and sweatshirt etc. market. The stock traded made a new high on Friday and attempted to break the $3 range. A slew of PR’s have been issued, and while we have seen a big volume increase from the week before, OBJE only traded 42k shares.
As far as fundamentals go, there really aren’t any yet, there were five PR’s though. I want to mention the PR’s because they sometimes are a prelude to future volume. OBJE is in it’s developmental stages and they actually haven’t manufactured and clothing yet. But as I touched on in prior pieces, fear and greed often take over when trading hot penny stocks, and momentum and price action often prevail over PE’s and cash flow. OBJE could also attract former Horiyoshi Worldwide (HHWW.OB) and Lyric Jeans (LYJN.PK) longs. All three are retail/fashion based stocks and some penny stock buyers have racked up huge profits in both HHWW and LYJN in the past.
Remember, we are trying to think outside of the box here because we are looking for the rotation of the LEXG funds. So add OBJE and the other LEXG rotation stocks that we will be previewing this week to your list of stocks.
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