MedSmart Group Inc (MSGP)

[The_Pink_Lawyer]

I respectfully disagree with claytrader's chart analysis with respect to his statements concerning declining volume both with respect to SSWC specifically as well as generally to penny stocks. It is true that, from a chart perspective, you want to see increasing volume with upward price movement and and declining volume with declining price movement. However, that is conventional wisdom as developed for and applicable to big board stocks, i.e., not penny stocks and certainly not sub-penny stocks. With respect to sub-penny stocks you actually want to see upward price movement on declining volume. Why?

Here's why:

On sub-penny stocks the first and foremost obstacle to any upward price movement or any sustainable upward price action boils down to one thing: dilution. Thus, for penny stocks, when you see great volume and little price movement it is because the issuer (company) is dumping new shares into the market. Thus, no matter how much volume it is simply met with new shares being introduced. As an example just today, MDIN traded over 1 billion shares and is at no bid/.0001.

With regard to penny stocks, conventional chart wisdom that is applicable to big board stocks do not apply. You cannot compare apples to oranges, or more specifically, judge the taste of an orange by comparing it to what an apple should taste like. Similarly, you cannot apply big board chart principles to penny stocks because they are simply different. That difference is even more pronounced when trying to apply big board chart principles to sub-penny stocks.

When you see a sub-penny stock have upward price movement on lower volume it is a strong indicator that there is no dilution, i.e., the reason the stock price can move upward is because there is no artificial selling pressure being applied by the issuer (company) or the issuer's representatives. Such lack of dilution is the Number 1 key that I look for in seeking a good subpenny stock with the potential to run big.

In my opinion, SSWC's upward price action on declining volume is a very strong technical indicator of both strength and sustainability for a strong run because there is no dilution of the stock. The stock is simply allowed to trade via the forces of supply and demand without intereference from artifical selling pressure.

Moreover, as price increases on lower volume it is a strong indicator that the float is being "locked down," i.e., buyers are holding onto their shares. By holding, it takes less and less volume to move the price upward because the supply of available shares is drying up in the hands of strong holders. In summary, the price moves upward on less and less volume as: (1) no new shares are being introduced through dilution; and (2) the existing shares are being taken out of the tradeable float by strong holders who will not sell. Thus resulting in upward price action as volume declines.