Double Bottom Pick for December (#1): YPNT.OB

Hey folks,

I just wanted to introduce you to an interesting technical chart pattern that has the power and potential to yield you more than just a decent return: The Double Bottom (or Triple Bottom). The Double Bottom pattern occurs when a stock has fallen from grace and takes a dip. When it establishes a support level, it attempt to bounce up. From then, it proceeds to test its resistance levels. Once it faces resistance, it proceeds to fall again and retest its support levels for a second time. Lets look at it this way. Lets say stock XYZ was trading at 15.25. Come earnings time, its numbers dissapoint, sending the stock crashing down. It eventually settles down and hits 8.80, where a few buyers step in and manage to drive up the price to 9.25. Unable to currently hold its position or venture higher, the stock slips back down to 8.90. Hitting its support level for a second time and establishing an absolute bottom (at least a temporary one), coupled with the stock being oversold at this point, triggers more buying (more confidence that most of the downside risk is gone spurs lot and lots of buying) which is the driving force that propels the stock sky high.

Now take a look at the stock below on the chart. Sounds like what I was talking about before? Yep. Although some people will be quick to point out that this idea may not work particularly well for penny stocks, I disagree. As long as the volume and interest is there from traders, you can still make money off a double bottom run up. Now remember when dealing with .OBs we dont want to play our IRA or 401k.

YP Corp (YPNT.OB) 3 month chart



Notice the increased buying interest once it hits second buying. Thats the signal we are looking for