FormCap Corp (FRMC)

[FinalFrontier]

Irrespective of whether or not they strike oil, if you just look at the stock price itself, it is not uncommon for a penny stock to slide to extreme lows just before it runs hard.

I have seen this happen with several other penny stocks (I have already seen it happen with 4 penny plays I've been in this year.)

Part of the reason it happens is dilution, but it also happens in some cases because of manipulation. The trees get shaken hard (intentionally) and the weak hands get scared out of the stock right before a big runup.

The mistake that many traders make is assuming a s/p decline to new lows means something is fundamentally wrong. Sometimes that fear is based on reality, but sometimes it is pure manipulation by those who want to get in cheap or add to their position.

Pennies often have their big run after falling to dramatic new 52-week lows. Again, not saying this will happen with FRMC, but it is common in pennyland. I've seen it happen too many times.