Over the years I have developed very successful strategies to find bottoming stocks, I have taken these strategies and created bottompicks.com. When searching for bottoming stocks, the first key is to understand what caused the stock to drop in the first place. The second key is to find out if there is any reason this stock should go back up in price. This can only be done with a complete understanding of technical analysis and the ?due diligence? of fundamental analysis.

When a stock is bottoming, it has dropped to a new recent low. This could be as dramatic as the lowest price in years or something as simple as a 50% pullback from recent highs. At this point the stock may begin to stabilize (trade sideways). This could mean that the stock is now poised to rise again in price, but it could also be preparing for another move lower.

With micro caps and penny stocks it is always easy to find stocks that look like they?re at their bottoms. It seems that every night we are analyzing a hundred different stocks that have recently broken their downtrend. If you are unsure of how to find stocks in up trends or downtrends, try a stock screener.

Once you think you?ve found a stock that is technically ready to begin that profitable trend to new highs, it is now time to do your homework. Fundamentally there are many things to look for. There are so many that I can only give you a brief overview. You will want to read the filings and news to understand the companies share structure, current operation, and if there are any future events that may cause the stock to rise. Some of the more important items you will be searching for in the filings are operating shares, authorized shares, float and warrants.

When you have found a stock that is bottoming with a solid share structure and is due to release great news, such as a new product or strong earnings. This is probably a good time to buy. Prepare to hold on, stocks in this market have been known to rise thousands of percentage points in a short amount of time.

About the author:

Keith Guyette M.Ed, J.D. is a professional trader and the owner of a stock talk board http://www.thepennystockblog.com as well as the head stock analyst for http://www.bottompicks.com

Just about thirty years ago there were only full service stock brokers, offering order execution and investment advice at extremely high costs. Then the first discount brokers came in with low fees just for trade execution. They gained market share pretty quickly because many investors were making their own investment decisions and were just looking for cheap order execution at the stock exchange.

The trend continued with the help of the computer technology and the invention if the Internet. Today online discount brokers are huge companies in a multi billion dollar industry. Order execution by phone got rare. Now self-educated investors and traders get highly sophisticated trading platforms from their stock brokers at no additional costs.

These software trading platforms offer everything from instant order execution at all US stock exchanges to real time quotes, news and charts. Even advanced technical analysis is available today at minimal costs. Transaction costs came down so much that they are not really an issue anymore. Only day traders who do sometimes up to several hundred trades a day have to watch their trading costs.

The full service broker is still an option for many. If you don’t have the time to watch quotes and read the news all time then you may want to have somebody who does this for you. This is where the full service broker comes into play. He offers personal service and attention, takes care of your financial planning, gives you investment advice, discusses all trading decisions with you and executes the trades for you. All these at a higher price of course.

If you don’t even want to bother which stocks to buy and why, then the money manager is your choice. He makes all the decisions for you and just reports to you what has happened.

The online discount brokers can also be divided into three groups. The first one is the classic discount broker which offers extremely cheap order execution through a simple and easy to use software platform. The second type of discount broker offers additional services upon request, for instance phone orders at extra costs or access to research information.

The third type of online discount broker targets professional private or institutional traders who need advanced order execution and direct access to different markets and order routing ways. They give you the option to choose between dozens of order routing ways and order types to improve the order execution speed or quantity.

No matter what broker you want to use, he should be member of the SIPC in the case the discount stock broker gets into financial problems. Then your account is insured up to $500,000.-

David A. Sorenger is a stock market expert and provides detailed information on online discount stock brokers at his web site http://www.StockTradingABC.com.

That said when you have decided on an monetary amount, whether it is $100 or $10,000 you should avoid the temptation to put all of it into one or more Penny stocks. But why you ask? Surely the whole point of putting the money into your stock broking account in the first place is to invest it.

Well yes and no. . . if you have all of your funds invested at the same time then you lose a lot in flexibility. You have few options when faced with the need to respond to a rapidly rising market. Or to profit form a newly acquired piece of information that one or more penny stocks are about to move upwards.

If you have invested all of you cash and your present portfolio is flat, the only way to buy into rising penny stocks market and get a piece of the action is to either. Use ?your own money?, for example money that is not part of your penny stocks investment fund (and is not money that you can afford to lose) a very bad idea. Or to get on the phone to your broker and see if can sell some of your existing shares so that you can buy into the rising penny stocks.

The first is obviously not really a good thing to do and is more akin to gambling than investment. After all if you couldn?t make a profit with the first group of penny stocks, why do think you could with the second. A more likely scenario is that you are throwing good money after bad, except that this time it is not money that you can afford to lose.

The second, though more sensible than the first, is not really what trading penny stocks is all about. The whole point is to be able to buy quickly if you think that a stock is about to rise. T sell quickly, as well, when the market seems to have to have peaked for your penny stocks, so that you can maximize your profit and sell before the market starts to fall.

If you keep a portion of your assets as liquid in your stock broking account, then you have the flexibility to move quickly as the market conditions dictate. A penny stocks trader without the ability to move quickly is likely to be missing out on many lucrative trades. By keeping around a third of your investment fund as cash allows you to buy into a rising market without having to rush into selling any penny stocks that may be under performing at that time.

That way you get to benefit from the rising penny stocks but can also hold onto the non performing or flat ones until they start to rise or you have decided that you need to cut your loses and get rid of them. Either way the point is that you are not rushed into a decision and can decide based on research and rationality, rather than a need for quick cash to fund your next investment.

The ability to move quickly in response to rapidly rising penny stocks can greatly affect your potential for profits in this most volatile of the financial markets. Keeping a portion of your penny stocks fund liquid will help you to achieve profitability and make the success of your investing venture into the world of penny stocks trading more likely to be a profitable one.

Buzz Scott has 12 years of Penny Stock investing. Big profits can be made in Penny Stocks, but there are also many dangers. Find some insider secrets at: http://www.penny-stock-secrets.com

Market caps of penny stock are often less than $500 million. Those that trade on low volumes over the counter take it as highly speculative. It is believed that it may prove hard task to sell penny stocks, once they are purchased. This is because of the fact that it may sometimes be difficult to locate quotations for particular penny stocks. Investors in penny stocks are expected to remain ready to face the possibility of losing their entire investment.

Nevertheless, the penny stock is able to lure new investors with its low price and its possibility to receive speedy profits that may reach up to one hundred percent in certain cases. In a very similar way, there always remains the possibility of severe drops that may even reach over 90 percent in the long term. Penny stocks are considered as investments, in which risk factor is highly involved. Consequently, investors must be aware of the various risks that are involved, such as limited liquidity, lack of financial reporting and fraud.

If liquidity is given prominence, then penny stock has very fewer shareholders. It is less ?liquid?; this term means that in comparison to a larger company, it will buy and sell less shares. Any unnoticed change in the demand or supply can result in the unpredictability of stock price. Consequently, it may lead to the rapid rise in the stock price or bring it down to the earth. Therefore, due to the lack of liquidity and volatility, penny stock is more likely to be exploited by management, market markers or third parties. It becomes very tough to sell a stock specifically on a day, when there are no buyers because of the lack of liquidity.

Another reason is that to remain on the OTCBB, the listing requirements are very minimal as compared to NASDAQ or NYSE. Generally, what happens is that those companies which could not make on bigger exchanges or have been de-listed, here they have an opportunity to get re-listed on the OTCBB or Pink Sheets.

Moreover, if compared to major markets, stocks trading on the Pink Sheets hardly have any regulatory or listing requirements. There is nothing to provide protection to shareholders such as accounting standards, change in notification of ownership of shares and so on.

All these features make it easy to use penny stock in any deceitful scheme. However this does not mean that all stocks that are listed on the OTCBB are deceitful. A number of stocks on the OTCBB have fair-trading.

Article by Stefan Rockhaus. To read further detailed information on penny stocks visit Penny Stocks Investor – You may reprint this article as long as no changes are made, and this resource box is left intact. More resources at Mega Info Spot

Below is a daily chart of NYSI (red line and right scale) and SPX (black line and left scale). NYSI made lower highs, while SPX made higher highs over the cyclical bull market. Currently, NYSI is near the top of the downtrend line, which indicates SPX is near an intermediate-term top, although NYSI pinpoints lows better than highs. Below the price chart is the NYMO 50-day MA, which is at a level similar to recent SPX intermediate-term tops. However, sentiment indicators, including the CPC 50-day MA (above price chart), which fell from an all-time high, and AAII and ISEE (not shown) show a great deal of pessimism, which is SPX bullish. It seems, almost everyone is expecting SPX to fall.

So, monetary policy and intermediate-term technical indicators are market bearish, while sentiment indicators are market bullish. Also, mid-September through much of October is historically the weakest market period. Consequently, there are major mixed signals. Nonetheless, the intermediate-term uptrend will turn into a downtrend at some point before the end of the year, if it hasn’t turned already. Given December and January are bullish months, there may be an intermediate-term downtrend in September through November. However, sentiment indicators suggest an SPX trading range, although a quick rise to 1,350 and/or a capitulation below 1,200 shouldn’t be ruled out. Unfortunately, there’s little clarity at this point.

Free chart available at http://www.peaktrader.com Forum Index Market Forecast category.

Arthur Albert Eckart is the founder and owner of PeakTrader. Arthur has worked for commercial banks, e.g. Wells Fargo, Banc One, and First Commerce Technologies, during the 1980s and 1990s. He has also worked for Janus Funds from 1999-00. Arthur Eckart has a BA & MA in Economics from the University of Colorado. He has worked on options portfolio optimization since 1998.

Mr Eckart has developed a comprehensive trading methodology using economics, portfolio optimization, and technical analysis to maximize return and minimize risk at the same time and over time. This methodology has resulted in excellent returns with low risk over the past four years.