KRY Watch

The Canadian mining company Crystalex International Corp. (KRY), which develops gold fields in Venezuela, extended Monday's huge decline, as traders decided that a gold-project partnership with a Chinese company wasn't quite as shiny as it first seemed.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
KRY $0.47

At 10:30 a.m. Eastern

The drama played out like this:

On Monday, KRY opened 35.2% above Friday's close on news of a partnership with China Railway Resources Group Co., bumped a bit higher, and then tumbled, ending the day 3.7% below Friday's close. Volume was 22.7 million shares, 40 times the number that traded on Friday.

Today, the price opened 1.9% above Monday's close, and then tumbled, traversing 17% high to low so far today, on volume the first 45 minutes that is more than six times the number of shares traded all day Friday.

This is an example of why penny stocks are fun.

Given such abnormal trading, I'm reluctant to say that support and resistance have any meaning whatsoever, at least in the very near term. But let's note the levels, just in case.

Reversal Levels

• $0.77, +63.8% (Monday's high)
• $0.63, +34.0%
• $0.56, +19.2%
• $0.47 <== You are here.
• $0.44, -6.4%
• $0.38, -19.2%

In the mid-term, KRY traded sideways from February 2009 until April of this year, when it began its rise. Longer-term, KRY high a swing high of $6.25 in April 2006, a lower high of $5.25 in May 2007, and declined from that point to a low of 10¢ in November 2008.  

Fundamentals

KRY as a development company is all expenses and no revenue. Seriously. Zero revenue for all of 2009. So this is entirely a momentum play. The most recent quarterly result was a loss of 30¢ per share.

Some ways to play

KRY is optionble, with one strike price to choose from: $2.50. I'm always reluctant to use options on relatively low volume penny stocks. In this case, I wouldn't know how to begin to put together a reasonable position. The only play I can see is to go short the stock, but it's a very high risk play.

---

The Great Reflation: How Investors Can Profit From the New World of Money OK. The credit bubble burst. Housing, burst. Shockwaves reverberated. Markets collapsed. What lies ahead as we remerge from the wreckage.

---

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

New to Private Trader? Check out the Reader's Guide. New to private trading? Here's a look at How to Become a Private Trader. Disclaimer

Tim Bovee, Private Trader tracks the trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment. No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.