CMG Holdings Group Inc (CMGO)

[coolnapz]

CMGO Big Picture

I've been saying for quite some time that CMGO is forming a bottom. The stock is trading right near it's 2009 lows, a time when it didn't even have any cash flow. Because this is a penny stock that trades low volume, it takes a while in order for bottoms to be formed and rallies to materialize.

My main income comes from daytrading large cap stocks, etf's, and futures, but I find that using the same techniques on penny stocks in my personal account can have huge payouts and better risk reward than a standard option play in which theta decay often kills.

CMGO has had the lows at .008 for 9 weeks, which is the only time it has done that since hitting it's 40 cent peak January 2011. The first chart gives you the full long term perspective. The second chart zooms in to show you specifically how the .008 low has held, and we in fact had one attempt at a rally before retesting the lows.

Remember, most people who are good at picking bottoms only stay for a quick profit and then run. When the stocks retest the lows, this is where you need to watch closely if it closes below or buyers start stepping up.

Right now it has NOT had consecutive closes below .008 and in fact is buyers are starting to step up at .009 to a penny. In other words the chart shows that not only are the lows holding at this level on a weekly basis, but buyers are stepping up.

This is the first stages of building a rally off of the lows. If you're expecting a vertical take off overnight due to a news event, you're likely to get disappointed. However, if you can be patient and continue to accumulate through up moves, pullbacks, sideways trading, and general choppy trading to the upside, you are more likely to be there the day when the stock finally gets an upside news catalyst. For now, it is time to accumulate slowly at these levels as a bottom is being formed.