It's time to get out of Medical Marijuana (MJNA.PK). Well, actually the time to get out was when the stock traded over $0.30, and I was pounding the table to get out. There is still plenty of downside left in this stock though, and I believe that the shares will be trading in the $0.02 - $0.05 range within the next couple of months, if not sooner. This is a penny stock that was pumped up based on a misleading "earnings report", and what you are seeing now is an orderly march to the exits. Whenever this stock pops - I repeat whenever it goes up - sell into strength before it's too late. Do not get greedy, do not "hope that it pulls a Medbox", just sell.
The Pumpers Try To Fool You
With a stock like this with questionable financials and management, you need to go underground for almost all discussions/analysis of the stock. This means messageboards such as the Yahoo! (YHOO) boards, InvestorsHub, and the like. Here is a very simple trick that you should use to know when to sell/short the name: whenever the "pumpers" are out in full force, they usually show up when the stock is on the upswing. Why? Because these are generally low float names that could easily be moved by retail investors, and when the stock is up, the "pumpers" are actually selling shares to you! That's right, they want to keep people buying and buying so that they can hit the "sell" button without attracting too much attention.
Experienced pumpers & dumpers generally don't want to attract attention by, say, selling a block of 1,000,000 shares in one order, so they will cleverly sell in many small-ish blocks in order to avoid suspicion. You need plenty of retail buyers putting their "gambling" money on this stock to successfully sell a huge batch of shares into strength for a stock like this, and the pumpers succeed gloriously.
Of course, once they're done selling (or likely going short), they will either quietly disappear, or they will reappear as "bashers" after they have taken short positions. Yes, your former "pumping" friends are now hiding behind different aliases bashing - the guys and gals who run these pump & dump schemes know that there is always money to be made from both sides of the trade.
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