Penny Stocks: Pump and Dump (SELL TO SUCKERS)

Penny stocks are those that trade at < RM 1.00.

Some investors confuse these low prices for value.

These stocks are often and easily promoted or manipulated.

Beware of the promoters or manipulators who hype these stocks in the internet forums.

They have often taken a position well before.

The unwary "investors" enter and soon find themselves buying these stocks higher than they can sell.

Here is an example of a stock that was from a forum.

Study the chart of the stock and the table of its prices and volumes.

I believe this chart depicts this penny stocks when it was being "Pumped and Dumped" by its promoters or manipulators. (Period of interest:  September 2010 to December 2010)

There are good lessons one can draw from this event.

Check the observations made below.

LCTH :  Daily Prices and Volumes

Prices (Daily)

Date Open High Low Close Volume Adj Close* Jan 19, 2011 0.28 0.28 0.28 0.28 437,800 0.28 Jan 18, 2011 0.29 0.29 0.28 0.28 435,000 0.28 Jan 17, 2011 0.28 0.29 0.28 0.28 469,400 0.28 Jan 14, 2011 0.29 0.29 0.28 0.29 479,000 0.29 Jan 13, 2011 0.29 0.29 0.28 0.29 993,400 0.29 Jan 12, 2011 0.29 0.29 0.28 0.29 744,000 0.29 Jan 11, 2011 0.29 0.29 0.28 0.29 409,000 0.29 Jan 10, 2011 0.29 0.30 0.28 0.30 833,600 0.30 Jan 7, 2011 0.30 0.30 0.28 0.29 678,300 0.29 Jan 6, 2011 0.28 0.30 0.28 0.30 1,728,800 0.30 Jan 5, 2011 0.27 0.28 0.27 0.28 583,600 0.28 Jan 4, 2011 0.26 0.28 0.26 0.28 487,300 0.28 Jan 3, 2011 0.26 0.26 0.25 0.26 492,100 0.26 Dec 30, 2010 0.26 0.26 0.25 0.26 217,000 0.26 Dec 29, 2010 0.26 0.26 0.25 0.26 93,000 0.26 Dec 28, 2010 0.27 0.27 0.26 0.26 86,000 0.26 Dec 27, 2010 0.25 0.28 0.25 0.27 1,468,000 0.27 Dec 24, 2010 0.25 0.25 0.25 0.25 166,200 0.25 Dec 23, 2010 0.25 0.26 0.25 0.26 203,800 0.26 Dec 22, 2010 0.25 0.26 0.25 0.26 648,700 0.26 Dec 21, 2010 0.25 0.26 0.25 0.25 822,000 0.25 Dec 20, 2010 0.26 0.26 0.25 0.25 598,400 0.25 Dec 17, 2010 0.26 0.26 0.26 0.26 400,600 0.26 Dec 16, 2010 0.26 0.26 0.26 0.26 57,400 0.26 Dec 15, 2010 0.26 0.27 0.26 0.27 169,600 0.27 Dec 14, 2010 0.26 0.26 0.26 0.26 456,400 0.26 Dec 13, 2010 0.26 0.26 0.25 0.26 649,500 0.26 Dec 10, 2010 0.26 0.26 0.25 0.25 732,200 0.25 Dec 9, 2010 0.26 0.26 0.25 0.26 303,900 0.26 Dec 8, 2010 0.26 0.26 0.25 0.26 304,600 0.26 Dec 6, 2010 0.26 0.27 0.25 0.26 625,500 0.26 Dec 3, 2010 0.27 0.27 0.26 0.26 628,600 0.26 Dec 2, 2010 0.27 0.28 0.27 0.27 283,400 0.27 Dec 1, 2010 0.26 0.27 0.26 0.26 93,500 0.26 Nov 30, 2010 0.28 0.28 0.26 0.27 875,200 0.27 Nov 29, 2010 0.28 0.28 0.27 0.28 579,100 0.28 Nov 26, 2010 0.28 0.28 0.28 0.28 378,800 0.28 Nov 25, 2010 0.28 0.28 0.28 0.28 720,800 0.28 Nov 24, 2010 0.28 0.28 0.28 0.28 305,900 0.28 Nov 23, 2010 0.29 0.29 0.27 0.28 928,300 0.28 Nov 22, 2010 0.29 0.29 0.28 0.28 1,057,800 0.28 Nov 19, 2010 0.29 0.29 0.29 0.29 504,200 0.29 Nov 18, 2010 0.29 0.30 0.29 0.29 552,100 0.29 Nov 16, 2010 0.31 0.31 0.30 0.31 811,000 0.31 Nov 15, 2010 0.34 0.34 0.29 0.31 3,137,500 0.31 Nov 12, 2010 0.38 0.40 0.37 0.37 2,716,800 0.37 Nov 11, 2010 0.37 0.38 0.35 0.38 3,223,300 0.38 Nov 10, 2010 0.38 0.38 0.36 0.37 789,500 0.37 Nov 9, 2010 0.40 0.40 0.36 0.38 1,299,100 0.38 Nov 8, 2010 0.39 0.40 0.38 0.38 4,302,600 0.38 Nov 4, 2010 0.32 0.41 0.32 0.38 11,517,500 0.38 Nov 3, 2010 0.31 0.32 0.31 0.32 466,000 0.32 Nov 2, 2010 0.32 0.32 0.31 0.31 419,000 0.31 Nov 1, 2010 0.32 0.33 0.32 0.33 1,067,600 0.33 Oct 29, 2010 0.30 0.32 0.30 0.31 1,036,800 0.31 Oct 28, 2010 0.30 0.31 0.29 0.31 127,000 0.31 Oct 27, 2010 0.29 0.31 0.29 0.31 572,600 0.31 Oct 26, 2010 0.28 0.29 0.28 0.29 309,000 0.29 Oct 25, 2010 0.28 0.28 0.28 0.28 204,300 0.28 Oct 22, 2010 0.28 0.28 0.28 0.28 130,000 0.28 Oct 21, 2010 0.28 0.28 0.27 0.28 156,100 0.28 Oct 20, 2010 0.27 0.28 0.27 0.28 254,000 0.28 Oct 19, 2010 0.28 0.28 0.28 0.28 40,000 0.28 Oct 18, 2010 0.28 0.28 0.28 0.28 12,000 0.28 Oct 15, 2010 0.27 0.28 0.27 0.27 0 0.27 Oct 14, 2010 0.28 0.28 0.28 0.28 70,000 0.28

Observations:

After a long period of promotion, many investors were made aware of the stock in the internet forum.  

Subconsciously, the stock entered their attention and was in their radar screen.  

Many hesitated and did not enter in the early stages of the promotion due to doubts and cautiousness.

Then, when the volume started to climb and the prices started to move upwards, these previously primed "investors" took notice.  

The more adventurous entered first and early at this stage.

As the price rose, more entered.  This was the confirmation that many of these "primed investors" were waiting and looking for.  "It must be true, the game is now on, I am getting in too."  

But note, they were buying at higher prices.  Some even bought more at higher prices (averaging up).   Did you notice that they were already paying a higher price than the "usual"?

Then more of the "dumb money" flowed in.  Look at the huge volume of stocks transacted on 4.11.2010.  This counter was the talk of the market now.  Ever wondered WHO SOLD on that day?  Of course, the manipulators and the smart money.

The party was as good as over by now.  However, more SUCKERS came in over the next few trading days.  With ALL SUCKERS in the stock now, and the smart money having moved out, there were no more SUCKERS to support the price.  

ALL the SUCKERS now holding the stocks were hoping to sell to ANOTHER SUCKER who was willing to buy from them at higher prices.  

Alas, NO new SUCKERS appeared.  This led to the precipitous fall in the price from the 6th trading day after the peak of the volumes and the price of the stock.

It was then a matter of awakening for those left holding the stock at high prices.  Over the subsequent weeks and months, they too realised they were SUCKED, holding or departing from the shares with their losses.

Prices (Daily)

Date Open High Low Close Volume Adj Close* Oct 13, 2010 0.28 0.28 0.28 0.28 80,600 0.28 Oct 12, 2010 0.28 0.28 0.28 0.28 135,000 0.28 Oct 11, 2010 0.28 0.28 0.28 0.28 120,000 0.28 Oct 8, 2010 0.28 0.28 0.28 0.28 0 0.28 Oct 7, 2010 0.28 0.28 0.28 0.28 20,600 0.28 Oct 6, 2010 0.28 0.28 0.28 0.28 42,000 0.28 Oct 5, 2010 0.28 0.28 0.28 0.28 13,000 0.28 Oct 4, 2010 0.28 0.28 0.27 0.27 220,000 0.27 Oct 1, 2010 0.27 0.28 0.27 0.28 91,900 0.28 Sep 30, 2010 0.27 0.27 0.27 0.27 72,600 0.27 Sep 29, 2010 0.28 0.28 0.27 0.27 28,400 0.27 Sep 28, 2010 0.28 0.28 0.28 0.28 190,000 0.28 Sep 27, 2010 0.28 0.28 0.28 0.28 3,000 0.28 Sep 24, 2010 0.27 0.27 0.27 0.27 1,800 0.27 Sep 23, 2010 0.28 0.28 0.28 0.28 60,000 0.28 Sep 22, 2010 0.28 0.28 0.28 0.28 172,000 0.28 Sep 21, 2010 0.28 0.28 0.28 0.28 5,000 0.28 Sep 20, 2010 0.28 0.28 0.28 0.28 0 0.28 Sep 17, 2010 0.28 0.28 0.28 0.28 6,000 0.28 Sep 15, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Sep 14, 2010 0.28 0.28 0.26 0.26 71,600 0.26 Sep 13, 2010 0.27 0.28 0.27 0.27 0 0.27 Sep 9, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Sep 8, 2010 0.27 0.27 0.27 0.27 10,600 0.27 Sep 7, 2010 0.28 0.28 0.27 0.27 36,000 0.27 Sep 6, 2010 0.27 0.29 0.27 0.27 0 0.27 Sep 3, 2010 0.28 0.28 0.28 0.28 25,600 0.28 Sep 2, 2010 0.27 0.28 0.26 0.28 76,200 0.28 Sep 1, 2010 0.28 0.28 0.28 0.28 0 0.28 Aug 30, 2010 0.28 0.28 0.28 0.28 43,000 0.28 Aug 27, 2010 0.28 0.28 0.28 0.28 20,000 0.28 Aug 26, 2010 0.28 0.28 0.28 0.28 70,000 0.28 Aug 25, 2010 0.28 0.28 0.28 0.28 186,000 0.28 Aug 24, 2010 0.29 0.29 0.28 0.28 40,000 0.28 Aug 23, 2010 0.28 0.28 0.28 0.28 20,600 0.28 Aug 20, 2010 0.28 0.28 0.28 0.28 200,000 0.28 Aug 19, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 18, 2010 0.29 0.29 0.28 0.29 163,700 0.29 Aug 17, 2010 0.28 0.29 0.28 0.29 241,500 0.29 Aug 16, 2010 0.28 0.29 0.28 0.28 341,800 0.28 Aug 13, 2010 0.28 0.29 0.28 0.29 214,000 0.29 Aug 12, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 11, 2010 0.29 0.29 0.29 0.29 0 0.29 Aug 10, 2010 0.29 0.29 0.29 0.29 37,500 0.29 Aug 9, 2010 0.31 0.31 0.29 0.29 19,000 0.29 Aug 6, 2010 0.29 0.31 0.29 0.29 0 0.29

Prices (Daily)

Date Open High Low Close Volume Adj Close* Aug 3, 2010 0.30 0.30 0.30 0.30 30,000 0.30 Aug 2, 2010 0.28 0.30 0.28 0.30 18,600 0.30 Jul 30, 2010 0.30 0.30 0.29 0.30 202,000 0.30 Jul 29, 2010 0.31 0.31 0.30 0.30 238,800 0.30 Jul 28, 2010 0.29 0.30 0.29 0.29 53,000 0.29 Jul 27, 2010 0.29 0.29 0.29 0.29 95,000 0.29 Jul 26, 2010 0.29 0.29 0.29 0.29 94,900 0.29 Jul 23, 2010 0.30 0.31 0.29 0.29 306,000 0.29 Jul 22, 2010 0.30 0.31 0.29 0.29 40,500 0.29 Jul 21, 2010 0.29 0.31 0.29 0.30 273,600 0.30 Jul 20, 2010 0.29 0.31 0.29 0.29 185,200 0.29 Jul 19, 2010 0.30 0.30 0.29 0.30 18,000 0.30 Jul 16, 2010 0.29 0.31 0.29 0.29 0 0.29 Jul 15, 2010 0.31 0.31 0.29 0.31 159,600 0.31 Jul 14, 2010 0.29 0.31 0.29 0.31 15,000 0.31 Jul 13, 2010 0.28 0.29 0.28 0.29 1,800 0.29 Jul 12, 2010 0.29 0.29 0.28 0.28 28,900 0.28 Jul 9, 2010 0.29 0.30 0.29 0.30 50,000 0.30 Jul 8, 2010 0.29 0.29 0.29 0.29 25,000 0.29 Jul 7, 2010 0.29 0.30 0.29 0.29 37,000 0.29 Jul 6, 2010 0.28 0.28 0.28 0.28 10,000 0.28 Jul 5, 2010 0.28 0.30 0.28 0.28 0 0.28 Jul 2, 2010 0.29 0.29 0.29 0.29 20,000 0.29 Jul 1, 2010 0.29 0.29 0.29 0.29 10,000 0.29 Jun 30, 2010 0.29 0.29 0.29 0.29 26,000 0.29 Jun 29, 2010 0.29 0.29 0.28 0.28 100,500 0.28 Jun 28, 2010 0.31 0.31 0.29 0.30 75,000 0.30 Jun 25, 2010 0.29 0.31 0.29 0.29 0 0.29 Jun 24, 2010 0.30 0.30 0.30 0.30 10,000 0.30 Jun 23, 2010 0.30 0.32 0.30 0.31 680,700 0.31 Jun 22, 2010 0.29 0.30 0.29 0.29 0 0.29 Jun 21, 2010 0.29 0.30 0.29 0.29 121,200 0.29 Jun 18, 2010 0.29 0.29 0.29 0.29 20,000 0.29 Jun 17, 2010 0.30 0.30 0.30 0.30 1,000 0.30 Jun 16, 2010 0.29 0.29 0.29 0.29 85,000 0.29 Jun 15, 2010 0.28 0.29 0.28 0.29 20,000 0.29 Jun 14, 2010 0.28 0.30 0.28 0.28 0 0.28 Jun 11, 2010 0.28 0.30 0.28 0.28 0 0.28 Jun 10, 2010 0.29 0.29 0.29 0.29 40,000 0.29 Jun 9, 2010 0.29 0.30 0.29 0.30 46,000 0.30 Jun 8, 2010 0.28 0.28 0.28 0.28 22,700 0.28 Jun 7, 2010 0.28 0.28 0.28 0.28 7,000 0.28 Jun 4, 2010 0.28 0.28 0.28 0.28 600 0.28 Jun 3, 2010 0.28 0.31 0.28 0.29 89,800 0.29 Jun 2, 2010 0.28 0.29 0.28 0.28 0 0.28 Jun 1, 2010 0.29 0.29 0.28 0.29 282,600 0.29 May 31, 2010 0.29 0.29 0.29 0.29 12,000 0.29 May 27, 2010 0.28 0.29 0.28 0.29 216,200 0.29 May 26, 2010 0.28 0.28 0.28 0.28 168,000 0.28 May 25, 2010 0.29 0.29 0.27 0.28 378,800 0.28 May 24, 2010 0.29 0.29 0.28 0.29 85,000 0.29 May 21, 2010 0.28 0.29 0.27 0.29 162,500 0.29 May 20, 2010 0.29 0.29 0.28 0.29 121,800 0.29 May 19, 2010 0.30 0.30 0.30 0.30 305,000 0.30 May 18, 2010 0.31 0.31 0.30 0.30 173,000 0.30 May 17, 2010 0.31 0.31 0.31 0.31 44,600 0.31 May 14, 2010 0.31 0.31 0.31 0.31 77,000 0.31 May 13, 2010 0.32 0.34 0.30 0.31 730,100 0.31 May 12, 2010 0.31 0.32 0.31 0.31 866,700 0.31 May 11, 2010 0.33 0.33 0.33 0.33 30,000 0.33 May 10, 2010 0.33 0.33 0.32 0.33 144,700 0.33 May 7, 2010 0.32 0.34 0.32 0.32 253,600 0.32 May 6, 2010 0.34 0.34 0.33 0.34 272,300 0.34 May 5, 2010 0.34 0.34 0.34 0.34 15,000 0.34 May 5, 2010 0.0178 Dividend May 4, 2010 0.36 0.36 0.35 0.36 206,100 0.34 May 3, 2010 0.36 0.36 0.36 0.36 30,000 0.34

Check also:

Penny  Stocks:  Pump and Dump

http://www.investlah.com/forum/index.php/topic,19103.0.html

GSB: "Hidden Gem" or "Pump and Dump Penny Stock"

http://www.investlah.com/forum/index.php/topic,18320.0.html