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Over Tues, Wednesday penny stock FRZ exhibited everything a potential short should: A quick surge up of over 100% in a span of two days all while having no news — a clear sign that this was a pump by a promoter (You can get a list of the top penny stock promoters here!). Knowing it was a pump, everyone knew there would be a dump. This is when your ability to read charts comes into play because charts will tell you EXACTLY when to short.
Well, FRZ developed a pattern on the 5-min chart that is known as a Triple Top Revsersal and it is one of the most predictable patterns to short. 9 times outta 10 the penny stock will tank when this pattern develops. The pattern sets up when a penny stock makes 3 equal(or close to equal) highs which is followed by a break in support. Pretty simple to understand, right? Here’s an illustration of FRZ yesterday (too bad I was in class and couldn’t short it) — YET another reason trading penny stocks is better than class! That’d be a good topic to blog about wouldn’t it?
This really is one of the best patterns for shorting penny stocks, and for good reason cause it works! The pattern is just like the Double Top explained in my FREE eBook, but instead of forming 2 “tops” i.e equal(or close to equal) highs, it forms 3. Consider this: The more a penny stock bounces off a specfic price point the more significant that price point becomes. Which is why the Triple Top Reversal is soooo much better than the Double Top, and more reliable..not to mention predictable…. and that’s all we want down here in the “gutter”
I’m planning on doing a whole series of charting 101 stuff, including how I set up my charts and more chart patterns, etc. in the next few weeks let me know if thats a good idea.
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hiya! hurry up with the charting101 series! i was directed here by another college boy who said your site was awesome! it really is! xoxo
“I’m planning on doing a whole series of charting 101 stuff, including how I set up my charts and more chart patterns, etc. in the next few weeks let me know if thats a good idea.”
Sounds like a great idea…you have an excellent blog here
Linked up this chart post…very nice
http://darksidetrading.blogspot.com/2009/04/great-bloggreat-post.html
Killer site, i wish i was as far as long as you are when i was 18 keep up the great work
-Adam
Got referred over here from Muddy. Great stuff. Loved the set up on FRZ. It was actually my numero uno watch for any action under 3.5 on Thursday but my internet was down in the morning.
Keep up the awesome work!!!
Thanks Muddy, Tort, Blz for your support! I’m going to try to make this become one of the best blogs out there!
Great job Mr. PennyStocker I’ll keep checking back- Muddy should give you a lot of hits
JV
Great post! I will be back to read Charting 101!
Fantastic site you have over here. Shocking for an 18 year old, keep up the good work your future looks bright.
Hey nice post. Have a question: I was looking at TEN today on a 5min/5day chart. Is this a triple top (referring to it hitting 7.50)? http://chart.ly/efqtz3
It’s over the course of 3 days, not intraday, like your example, so would it still have the same effect? any feedback helps. Cheers!
Erich,
Oh yea, that’s a triple top if I ever saw one! You can use the same chart patterns intra-day and daily as they have the same effect. The point is, as long as it keeps hitting a certain price point, but can’t pass that point 3 or more times..short at that specific price once it reaches it.
question from beginner how do you short stock if you do not own it? I understand buying/selling options in stock market but penny stocks do not offer options so how acctually you can benefit from falling penny stock?