CDNX stocks at lows, consolidated, and cheap

The CDNX (Canadian Venture Exchange) is dominated by penny stocks. At the end of the year 2000 the average price of a CDNX stocks was under $.50. Many investors simply go on the premise that they will buy cheap stocks trading at lows on the CDNX and hold them for larger gains. Unfortunately, in purchasing these low priced penny stocks one risks the possibility that they will be delisted or possibly consolidated and renamed. Nevertheless, some investors feel that though they may take this risk with some stocks that the ones that gain, if they hold onto them will outway the losers. If one does take on such a strategy it is wise to go beyond only the technical side. For example, one might also check to see if the company is issuing options and private placements to the insiders indicating they may see a future with the company. Another consideration is if they have done a recent consolidation or Name Change. Often this can be an indication that the insiders have plans for the company if they have put the time and money into reorganizing it. One other consideration might be to check how much money the company has in the bank. This example screens out stocks on the CDNX trading within 20% of their year low and trading between 5 and 20 cents. In addition the issued capitalization has been set to under 7000 000 shares. Finally, they must have been consolidated in the last 8 months. When you view the charts you will see a CO button above the volume scale which indicates the date of the consolidation. You can click on this button for details in ChartSmart.

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How to Screen Out these Stocks with ChartSmart

In order to create this filter in ChartSmart you should add all the regular criteria as you would normally. Before you actually run the filtered list though you must pre-screen the consolidated stocks. Start by clicking on the CRITERIA TO BE USED tab and you will see a criteria in the white box called NAME CHANGE FILTERS. If you click on this you will find it under the SPECIAL tab and it will be checked off. Click on the EDIT box beside the checkbox to display the NAME CHANGES FILTERING MENU. You must do a preliminary screen in this menu before you do RUN FILTERED LIST. To do the preliminary screen first be sure you have checked only the CONSOLIDATION option. Next go down to the dates and in the BEFORE DATE box put a date that is on the current day or greater. Then in the AFTER DATE box put in the date it was approximately 5 months ago. When you are done click on RUN FILTER and you will get your preliminary list of stocks which is those with CONSOLIDATIONS 3 months ago. Next, in order to combine this group of stocks with your other criteria click on the RUN FILTERED LIST BUTTON.

Watch the video of this strategy.

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