There's a lot to love about penny stocks and other shares that trade over-the-counter: They're inexpensive, they can double or better at the drop of a hat, and - let's be honest - they can be pretty exciting.
I mean, making money is always exciting, but watching a small bet return a big payoff in a few days - that's something else.
But penny stocks also offer something you don't get in big stocks like Tesla or Microsoft: You can get second and even third chances at massive profits.
The truth is, when you're watching a penny stock, you might very well miss the first crack at 100% or more in gains. But when the stock is good and the technical setup is right, you've got a decent shot at watching history repeat - and you won't have to wait long, either. Good luck waiting for AMZN or PYPL to do that.
I've been watching a three-cent stock lately - watching for quite a while, in fact.
I was about to pull the trigger, but I was a little too rigid in my thinking about an entry point.
Sure enough, the stock blasted off - 500% higher. Am I kicking myself? Well, maybe a little.
But I'm not being too hard on myself, because I know that the stock is actually in a great position to do it all over again before long.
Let me share the ticker and the high-profit-potential setup with you now...
Moving Toward Another Triple-Digit Rally
Like the name suggests, Cyberlux Inc. (OTC: CYBL) is all about high-tech lighting. Serious lighting, as in, they make powerful, portable lighting systems for battlefield operators in places we're probably not supposed to know about, military bases and installations, for a client list that includes the Air Force, various National Guard units, Special Operations Command (SOCOM), and the Defense Logistics Agency. Its systems are used in emergency and disaster recovery scenarios, too. Cyberlux has been a defense contractor for something like 10 years now.
Like I said, serious lighting.
That's all fascinating, but as is so often the case with penny stocks, we're less interested in what the company does than in what its stock does. We're not looking to bet the farm on this one or add it to the kids' college fund - we're looking for big, fast money.
As I mentioned in my "one that got away" sob story, this stock went ballistic toward the end of September, but the shares bumped up against a ceiling of sorts at $0.06.
The stock fell back down to $0.05, and has fallen through the $0.04 and $0.03 level since Sept. 30.
But in the last few sessions, volume is starting to pick up again, which is a bullish sign that the stock is entering another, possibly very powerful, upward trend. Its relative strength index (RSI) reading of 45.5 is bordering on oversold.
Bottom line, conditions look good for big gains ahead on CYBL.
Nab this one at market and set a 10% trailing stop when the stock gets to $0.05 to protect your principal and your profits.
There's another small OTC stock I want you to know about - it could have even bigger profit potential. It's a $2 EV company that's already been on a 1,140% plus run over the past year. But like I said earlier about small stocks, it's possible to get second chances. This company is looking to list on a major U.S. exchange - something that could happen any day now. If that listing happens, the potential is there for another surge past 1,140% over the next 12 months. You can get details on that here...
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.