How To Pull In 24% Gains In A Week...

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Our own small-company specialist, Robert Morris, has found a way to 'sniff out' tiny penny stocks on the verge of a major breakout.  And the timing for this has never been better.

You see, the system takes advantage of an obscure SEC regulation that sends penny stock prices through the roof.

We've seen some stocks gain 852%... 5,450%... even 17,496% in no time flat.

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As many of you know, I love to use technical analysis to find low risk trading setups.  Here’s a super-easy trade I found recently in Transocean (RIG).

Now I’m sure many of you know the story on RIG.  Their deepwater drilling rig recently sank to the bottom of the Gulf of Mexico.  They were drilling a well for BP.  It was a devastating accident for the company.

And their stock sank as the news got worse…

For months, investors weren’t sure what the future held for RIG.  The liability the company faced for cleaning up the oil could have been immense.

I didn’t own their stock before the accident in the Gulf.  But the sudden drop in the share price got me interested.  So over the last few months, I’ve been waiting patiently.

Waiting for just the right time to buy the shares…


Take a look at the green line in the chart above.  It’s the $46-$45 support zone for Transocean.  Picking up shares at this support level was a no brainer.

Why was this a no-brainer trade?  It’s simple…

RIG was trading at this area back in December of 2009 before it shot higher.  It was also trading here in early June and buyers stepped in.  And two weeks ago, it traded here once again… and I pulled the trigger.  I bought shares at $46 (the green circle).

All I was looking for was a low risk trade.  This support zone gave me a low risk entry.

Why is this support zone a low risk trade?

Well, if RIG fell to $42, I planned on closing the trade for a small loss.  My risk was defined before I even entered the trade.  I was accepting $4 of risk ($46-$42=$4).

But the upside potential was much larger than my $4 of risk.  You see, last week RIG was reporting earnings.  And they were also going to answer some questions on their liability in the Gulf.

Turns out, according to their contract with BP, their liability is limited…

The shares shot higher on the news.  As you can see, RIG was trading over $57 just a few days ago.  This is up over $11 from where I jumped on board.  That’s a gain of 24% in a week.

I sold a portion of my shares before the close last Friday.  I locked in some solid profits.  But I’m keeping a few shares just in case RIG decides to shoot higher from here.

Here’s the bottom line…

Don’t let the markets frustrate you.  Just take a deep breath and relax. Whatever you do, don’t pull your hair out trying to figure out the markets.  Let the markets do what they want to do.

If you’re patient, you’ll come across low risk opportunities in your research.  If you know what to look for, you’ll find the markets are brimming with opportunity.  Just be ready to put your money to work when the time is right. 

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