Penny Stocks and the “Pump and Dump” Pattern
📚 Penny stocks are shares that trade at a very low price, generally below $5 per share.
📖 These stocks belong to companies with a small market capitalization, meaning the total value of all their shares in the market is relatively small.
📊 The “Pump and Dump” is a common pattern in the penny stock market where stock prices rise rapidly and then fall. This pattern develops in 7 steps:
1-Pre-Pump or Promotion: The stock begins to be heavily promoted.
2-Ramp: The stock price starts to rise.
3-Supernova: The price reaches its peak.
4-Cliff Dive: After the peak, promoters and early investors begin to sell their shares.
5-Dip: The stock falls significantly.
6-The Dead Pump Bounce: After the initial drop, there may be a small bounce in the price.
7-The Long Kiss Goodnight: Finally, the stock stabilizes at a low level.
📚 Penny stocks are shares that trade at a very low price, generally below $5 per share.
📖 These stocks belong to companies with a small market capitalization, meaning the total value of all their shares in the market is relatively small.
📊 The “Pump and Dump” is a common pattern in the penny stock market where stock prices rise rapidly and then fall. This pattern develops in 7 steps:
1-Pre-Pump or Promotion: The stock begins to be heavily promoted.
2-Ramp: The stock price starts to rise.
3-Supernova: The price reaches its peak.
4-Cliff Dive: After the peak, promoters and early investors begin to sell their shares.
5-Dip: The stock falls significantly.
6-The Dead Pump Bounce: After the initial drop, there may be a small bounce in the price.
7-The Long Kiss Goodnight: Finally, the stock stabilizes at a low level.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.