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Wednesday, December 21, 2011

1 way to tell if someone is front loading a particular stock

One way to tell if someone is front loading a particular stock is:

If someone is loading up on stock shares before news, a pump, a filing, etc...you'll see that volume on the chart. Now here is one of the ways of finding it.....

Volume trends. What does this mean? It means volume moves in up trends and down trends. If you look at the volume before the pump, there is hardly any at all.  In front loading it sort of looks like a stair case, where the volume increases/decreases slowly every day.

Here's an example; I googled AAPT compensation and found an alert the end of January. See where the volume started increasing before???
 

Now in this case, if you had gotten in before the breakout then that's great. But you need to know when to get out also.  Remember I watch the 50 day moving average.  By this chart you can see once the share price dropped below the 50 M/A the downtrend started.  

If you look at April someone tried to run it again for a second leg and gave a little of a gain, but again look at where the 50 M/A is.  Cuts right through and didn’t want to run anymore.  Hopefully you are out back on the first leg before the downtrend started and not a bag holder.  Learn to watch the moving averages and volume

Volume is probably the most important indicator with penny stocks. That's what all pumps are about, it's all about the volume. And most penny stocks are pumped at some point in time and very volitile.  So watching the volume is very, very important.

Stay tuned, do your due diligence and have a green day.

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