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Two Fundamental Penny Stock Investing Tips
So how do investors get it right? With the high risk in mind, investors keep up to date on penny stock trends by utilizing rules of thumb. This article seeks to outline two of such fundamental penny stock investing tips.
1) Use a Stock Screener
Stock screening programs allow investors to filter through a database of stocks based on key identifiers that the user indicates. The investor will enter qualifiers such as industry type, market cap, sales, dividends, and so forth. A stock screener will process in minutes what may have taken several hours of sorting through filings and other reports. It will narrow down a list of prospects that the investor can then delve into further detail on.
2) Understand and Make Use of ‘Support’ and ‘Resistance’ Levels in Charts
Charts and technical analyses have a tendency to intimidate new investors. While there are some sophisticated methods of analyzing charts, there are also some fundamental basics that investors can make use of such as Support and Resistance Levels.
- Support Levels - Look out for stocks whose shares drop to a certain price region and then bounce back up. The more often this happens at a specific price level, the stronger the stock’s support level is said to be.
- Resistance Levels - Resistance occurs when shares go up to a certain level and then fall back down. Over time, this roof level is called the resistance level. Stocks with resistance levels should be watched out for.
There are, of course, more fundamental tips for wise penny stock investing. Another powerful resource is to have a consistent flow of information from a penny stock newsletter. A free penny stock newsletter enables you to leverage the expertise of experienced investors and industry experts. However, nothing beats your own research when it comes to smart penny stock investing.
