Buy Low/Sell High—Two Companies with Great Potential by johnjordan576


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Buy Low/Sell High—Two Companies with Great Potential

Galena Biopharma, Inc. (NASDAQ/GALE) is a penny stock that’s having a good year. Trading
around the $0.50-per-share level at the beginning of the year, the shares hit $2.77 on the stock
market with strong liquidity. This penny stock has been picking up positive Wall Street coverage
recently, and I’d say it’s worth following the company’s developments. Galena’s stock chart is
featured below:

Chart courtesy of
This is a stock market where bottom fishing among penny stocks is a worthwhile strategy for
speculators. I think one specific stock market group that looks particularly attractive now is U.S.-
listed Chinese stocks. Many of these stocks have been hit hard, but are good businesses with
good prospects.

Recently, I featured China Ceramics Co., Ltd. (NASDAQ/CCCL) as a penny stock that fits into
this group. This stock can really move when it wants to, because it isn’t all that liquid; average
daily trading volume on the stock market is approximately 82,000 shares, according to Yahoo!
Finance. The company’s third quarter was down slightly, and the company expects the fourth
quarter to be tough, but a penny stock like this can bounce strongly higher on the first batch of
good news from the Chinese real estate market. Recent economic data from China has been

Chart courtesy of
Speculating in penny stocks is, of course, a risky business. There’s a reason why a
company’s stock market price is below $5.00 a share. But, there’s very little growth available these
days, and you can’t expect much from the broader stock market. The buy low/sell high trading
strategy is always a worthwhile endeavor with risk capital.
The stock market isn’t looking good right now. Trading volume has been consistently in decline
since the subprime financial crisis, and even though corporate balance sheets are strong, large-
cap companies can’t grow their revenues and earnings if GDP isn’t growing. So, it’s a tough stock
market to be in, and I think we’re going to get more downside over the near term.

With this backdrop, investors and speculators don’t need to rush into any positions. There’s no
tailwind available from the broader stock market, but most large companies have great balance
sheets. For risk-capital speculators, this is a good time to be putting penny stocks and other
potential turnaround situations on the radar screen. I think we’re almost at the cusp of a new
business cycle, but the U.S. economy will likely have to experience another recession before it
takes off.

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