We’ll now speak of a topic that is very catchy and essential - how to see when the stock has peaked. We're talking now about Pink Sheet penny and sub penny stocks, mainly inverse stocks. The rules are different for companies that are bigger.
Then likely those who purchased inexpensive, others, or short sellers, come in and educate those people who are carried away a lesson by slamming down the stock. These sellers will not be self-conscious because, when they're short sellers, they're going to attempt to slam the stock down, and since they understand how explosive these stocks are, that the up move may not continue very long. The quicker the stock bangs down, the better for them as the more the longs will be discouraged. So how do we understand when to sell? First, we tend not to understand when to sell. These stocks are really so explosive nobody can actually let you know when to sell. We all are thinking.
Who is able to let you know to sell a hot stocks which is quickly growing? They might have told you it was overpriced, but just when to sell, no. Second, examine the market capitalization and compare it to the true business prospects of the company. Is this company a start up? Then why would it ever have a $100 million market cap? Seem to escape. Follow up the stock as best that you can, but you're looking for just about any hint to take outside you. You shouldn't be brave, be cowardly - in the event the marketplace turns and you don't understand why, you ought to escape.