What a Penny Stock Pump and Dump Looks Like
Penny Stock pump and dumps last anywhere from an hour to a week, however the charts all look the same and follow the same pattern. BIG NEWS!!! then a rapid rise in
price. At some point, those that bought at lower prices start selling to take profits. That’s when the price stalls and begins to come down. More of those with cheap shares and those that bought high start selling turning it into a full scale dump. At some point, most are selling at a loss as those that first got in are already in their next stock play.
With any pump and dump, those that buy at high prices are paying those who got in at lower prices. On the chart in this post, most all those that bought above .15 lost a lot of money. Notice the fall can be a bit slower than the rise, this is caused by people that are hoping for a come back or even worse, averaging down. If you mess up and get caught in a dump, get out fast because the price almost never comes back. Save your money for another day.
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