Trading any penny stock is a big gamble. However, with some research and patience, we can turn this high risk trading in penny stock into great reward. I have been following Lithium Corp, part of technology sector, past 6 weeks. I have noticed something recently that I wanted to share with everyone.
First of all, the support level for LTUM is between $0.95 - $1.00 and the top resistance level resides at $1.40. As you can see LTUM has been trading pretty much in between the resistance and support levels. I have circled two volume areas for discussion. The first circle, smaller of the two, occurred when LTUM rallied to $1.40. However, after hitting its resistance, it decline in the next month and eventually reached its support at $0.95. Immediately after hitting its support, it rallied again and is about to reach it resistance level at $1.40 again. This time it rallied with even higher volume, marked by a larger circle. This is a key evidence that LTUM is gaining momentum. I personally went LONG today in LTUM at $1.26. I do think that LTUM now has a better chance of breaking its resistance level this time especially due to higher volume.
Keys to Watch:
- I will be keeping a close eye out on the volume everyday. I am hoping for the volume to maintain its current level. Falling volume could mean LTUM is slowing losing its momentum.
- If LTUM trades below $1.20, then I will be exiting this position. It could be headed towards its support at around $1.00 again.
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