Finding Penny Stocks With Potential for AMAZING Growth!

| September 8, 2014

bullish marketFinding Penny Stocks To Make You RICH…

Ok, let’s just cut to the chase.

If you’re looking to invest or trade penny stocks, you’re looking for stocks that will drive the biggest gains.  You’re looking for penny stocks with the potential for amazing growth.

Not penny stocks that are a failure!

You’re looking for the best of the best…

So where do you start your search?

Where do you go to find amazing penny stocks?

You’ve got to start with a plan!

The Plan to Find Penny Stocks With Potential for AMAZING growth!

You can break this plan down into three simple steps… keep in mind, it’s simple, but not easy.

So here are those three steps…

  1. Identify market trends
  2. Identify industry trends
  3. Pick the strongest penny stock in the industry

For those of you well educated and practiced penny stock traders, you can quit reading now and get to work.  But if you want to get an inside look at how we do these three things, keep reading.

Start identifying trends in the penny stock market.

Believe it or not, the biggest mistake investors make is investing in any type of stock when the market is heading the wrong way.  Think about it.  The first step to picking a winning penny stock trade is just getting the market direction right.

Are we heading up, down, or sideways?

Often times penny stock investors get side tracked trying to find the tops and bottoms and pivot points in the market.  They’re looking for breakouts, or break downs.

When in reality, the biggest thing they should do is focus on the overall market trend.

Here’s how to do it… pull up a graph of the market… (I like the S&P 500) and take a look.

S&P 500

I just pulled this 1-year chart of the S&P 500… the red and black line is the market… the blue line is simply the 200-day moving average.

It doesn’t take a rocket scientist to see the market is up and to the right.

Will it always be like that?

Nope… but now you know the market is heading higher and as the famous saying goes, “The Trend Is Your Friend.”  If you’re looking to buy penny stocks, at least the wind is at your back.

If you’re thinking about calling a top and trying to short a bunch of stocks… well you might think twice.

So that’s step one to finding penny stocks with the potential for amazing growth, what’s next?

Step Two:

Follow up by identifying industry trends

Ok, yet again we have an obvious observation here…

Look for the hot industries.

You’re not going to be investing in the buggy whip industry… no big growers there.  If you’re going to find a penny stock with the potential for amazing growth, you’ve got to focus on the hot industries.

Once again, sail with the wind at your back.

What’s hot right now?

Well, if you’re paying attention to the markets, you know everyone is talking about topics like alternative energy, electric vehicles, oil and gas companies, and anything related to Russia!

Look for long term trends that you can piggyback on.  You want to find industry trends that will carry all of the companies in an industry higher… once again, let the market do your heavy lifting.

Don’t shortchange your research here… this is a critical part of the research.  Research like this will expose strong sectors to focus on… and weak sectors to avoid.  The bigger the trend, the bigger the idea, the bigger the potential gains from companies capitalizing on the trends!

Once you’ve got an industry or two picked out, now comes the fun stuff…

Finally, Identify the STRONGEST penny stock in the Industry

Once you have your industry targeted, start tearing it apart, and find every stock in the space.

Look for big ones, small ones, fat ones, thin ones.

Get as big of a list as possible… you want to cast a wide net, because you never know where that next big winner will come from.

Ideally you’ll have a bunch of companies to start digging into.

Now, I can’t take you step by step through the analysis of a company for a penny stock trade… that could take hours…(and I’ll probably do it at a later time).  But dig into these companies. Do your fundamental research and start looking for red flags.

Look for reasons NOT to invest and quickly throw those companies to the side.

Only focus on the cream of the crop and you won’t be disappointed.

By the end of this exercise, you should have a really good list of penny stocks that have the potential for amazing growth!

There you have it… three simple, but often overlooked steps, to uncovering great penny stocks.

Now it’s your turn, start your research now.  If you follow these steps and come across some great trade ideas, let us know… we’d love to hear from you!


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Category: Investing in Penny Stocks, Penny Stock Tips

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