The Underworld hosted by Chucky D.

[Charles_Darwin]

Greetings! My name is actually Rob, but I go by Charles Darwin here. Why? I don't know. Anyway...

Welcome to the Underworld! I call it that because I primarily trade sub penny stocks. The repulsive, scam-ridden stinky pinkies, belched from the bowels of the Pink Sheet and OTCBB markets.

Here I will post my picks and analysis on these P's OS. Yeah that's right, P's OS. POS's wouldn't make any sense if you actually said it...

I will also make this as educational as possible for any curious onlookers (members and non-members) who may be new to trading. I like to teach when I am able. I also like to have fun and laugh, so I'll try and use as much humor as I can without detracting from the substance.

My rules for my thread:

1. No pumping. Take that crap to iHub with all the other foaming-at-the-mouth moronic bag holders. I could go on and on and on about how big of a farce and how ridiculous that site is, but I'll stop here.
2. No drama. No name calling, fighting, or otherwise uncivil behavior. If you're old enough to trade, then you're old enough to have a nice desk job that you wear a suit to every day, so why act like a pimply 15 year old loser having a virtual brawl in an AOL chatroom?
3. Follow rules 1 & 2.
4. Don't forget rule #3.

Alrighty then! Time to get started...

[Charles_Darwin]

XHUA is coming off a bottom and starting to break out of an ascending triangle pattern on the daily chart. I took a position in this last week at .0019. I had an order in for .0015 to try and get some shares from a bid whack, but it never filled. No biggie. I believe this is going up substantially. I don't expect it to explode and run off the chart, but I am confident that this will be a steady gainer. In fact I prefer it to be a slow and steady gainer because it's healthier for the stock. Stocks that shoot straight up more times than not, fall right back down at an even faster speed.

Free Real-Time Level 2 Quotes for XHUA



As you can see from the chart it was in a downtrend, then found a support level and formed a nice base at .0012. Then it had a nice little pop that brought it back to life. Consolidated in the .0014 to .0018 range while making higher lows, thus forming the bottom trend line of the ascending triangle (Bulls gaining ground). Pushed up and over the .0018/.0019 resistance area, and closed at .0022 Friday. Our next key support level IMO is .0019. We may see some resistance at the 200 day simple moving average, but in all honesty I don't think it will be too hard to break it. We closed pretty strong on Friday so we'll see if we get a continuation of that on Monday. Obviously the more candles you have to work with the easier it is to paint a picture, so we'll see how this next week goes. I'm not expecting a huge run immediately since I'm playing this off of a longer time frame, but I do believe that those who are patient will see great returns from this stock.

[Charles_Darwin]

SGCP I believe is somewhat the same setup as XHUA, but in the earlier stages. I took a position on Tuesday, and as long as we stay above the SMA(50) I will hold. The EMA(20) looks like it's going to cross above the SMA(50) which of course is good, and I'd like to see if it can establish support over it, as well as see the SMA(50) begin to angle upward. At this point I would expect to see relatively sideways trading this week, but if there is a catalyst such as a PR or whatever, I won't argue against it. The reason that I won't mind that with this stock as apposed to XHUA, is that SGCP's share structure is a little beyond my taste with its outstanding shares over a billion. The more shares out there, the more work it takes to move it. Think of each share as having a specific weight, and the heavier a stock is, the harder it is to move.

That's all for now. If I find anything noteworthy I'll be sure to post it. I haven't done my weekend scans yet, so it's possible that I might find something worth posting later.

[Charles_Darwin]

One last thing. I would like to issue a warning to everyone about a particular stock, CMGR (used to be CMLT). The CEO makes a lot of money by suckering in newbie investors with fluff PR's, and then floods the market with shares thus driving the price down into the triple zero cellar. Eventually this stock gets back to having no bid, and the company does yet another reverse split. If you look at the chart you will see that it appears as though this was once trading at $25 (or more if you look at a longer time frame). It was never that high. The only reason it looks that way is because of the continuous reverse splits it has undergone, and that is one thing that fools people into believing that this is a hidden gem. My advice is to simply stay away from this stock, and any stock with a similar history. If you read through other message boards you will see that there is some optimism by some people that the company is finally turning around, but don't buy into the hype. The CEO has a history of putting out positive information just before a reverse split. Who knows? Maybe one day this company will actually turn around, but I'll only believe it when I see it. If you take nothing else from this post, just remember that .0001 is NOT the lowest a stock can go. After a R/S, even a share price of .01 could be lower than .0001 before the reverse split.

[Charles_Darwin]

XHUA closed above the SMA(200) for the first time since December 9th. I wouldn't be surprised to see it pullback and test .0019 as support, but I'm also not saying it will. The ask is very thin and it doesn't take much action to start burning through the ask side of the L2. We are also above the 50 week SMA, and that's really the level I'd like to see hold as support.

SGCP had a healthy day. There was some bid whacking going on earlier, but it came back and closed up 5%. All I'm expecting this week is consolidation above our support level of .0017. Preferably I'd like to see .0019 hold, but it's no big deal if we get a close below it. I also want to see the EMA(20) continue to rise and the SMA(50) start to curl upward. It's stayed flat the last 3 days so as long as we maintain these PPS levels it shouldn't be a problem. The volume has been tapering off since last Tuesday's little pop, and it's still holding these higher prices just fine. That tells me that the market believes these prices are fair, and that most of the sellers are drying up. I really think this stock is going to run, it's just a matter of waiting, and one thing I've learned is that patience pays off.

That's all for today.

[Charles_Darwin]

The Cup and Handle is a bullish continuation pattern that marks a consolidation period followed by a breakout. As its name implies, there are two parts to the pattern: the cup and the handle. The cup forms after an advance and looks like a bowl or rounding bottom. As the cup is completed, a trading range develops on the right hand side and the handle is formed. A subsequent breakout from the handle's trading range signals a continuation of the prior advance.

Another name for the cup and handle pattern, is the lopsided breast pattern. See chart below for a depiction.



The left breast (the one on the right as you look at it) is the cup, and the range trading to the right of it is the handle. Who said learning technical analysis had to be boring? And all the jokes one could make when referring to the lopsided breast pattern... Cup... Handle...

[Charles_Darwin]

Watching TADF for a possible bounce play. Decent bid support at .02, but I'm gonna watch and see if it breaks through before I enter. I like the chart to prove to me that I should trade it. If you have to try and convince yourself to do it then it's probably not a good trade.

[Charles_Darwin]

.019's are painting now. That's why I like to wait. .02 bids were wiped out really quick.

[Charles_Darwin]

Ugh. Strategy Desk froze on me. Nevermind. Screw it. Looks like it's bouncing back down off of the EMA(20) anyway.

[Charles_Darwin]

Man that really chaps my ass...