Buying and Selling Penny Stocks

It's ok to buy a stock at the low and sell at the high over and over again,
but only if you monitor the company financials each and every time that
you buy-in and sell-out. Don't forget that you should diversify your stock
portfolio by spreading your money between many good penny stocks.

There will be times when you might want sell your stock for only a small
profit or no profit at all. Bad news of almost any sort can drive a stocks
price down very quickly. This is why it's important to follow your stocks
very closely.

Here's a few reasons to sell your penny stocks (for profit and/or protection) :

If your company announces a reverse stock split I would suggest that you
get out and sit on the sidelines awhile before considering getting back in.
Many companies do this to raise the price of the stock. They issue fewer
shares that are worth more money per share, but the price usually falls.

Another thing to be on the lookout for is the possibility of your company
raising cash through an equity offering. If the company needs more
working capital it will issue more shares of stock to sell to the public. This
will dilute the share value and most times the stock price falls.

If the company you own starts showing large increases of it's product
inventory you should start thinking about selling your shares. This is a
sure sign of coming trouble. When sales are down inventories go up. Big
inventories also create additional expenses for the company. Get out!

If you hear news that your company is about to merge with another you
could be in for some good news. This usually causes the stock price to
spike-up when the news gets out. Once the merger is announced prices
will fall back to the agreed merger price. Sell on good news for a profit.

If you find out that another company has made an offer to buy your
company's stock at a lower price then get out. The company that made
the offer must think that the lower price is the true value. If your company
accepts then they must also think that it's only worth that much. Get out.

If you find out that a warrant is about to expire you should also get ready
to sell your stock. Let me take a minute to briefly describe a warrant.