ACU.V - Nobody ever went broke taking profits

I haven't written anything on Aurora for a while, however if anyone is still following this blog...I think there are at least 3 dedicated readers....I thought it best to disclose that I've closed out my position.  The reason is because it looks to me like the dinner bell may be ringing calling the herd to the trough.

With that being said its entirely possible and probably likely that there's still more upside left, and perhaps some significant upside.  But as it says in the subject line right at the top, nobody every went broke taking profits.  I first established a position in ACU.V at 15 cents and then averaged it down to 12.5 cents.  If the PPS climbs to 40 or 50 cents...or more, then I'll just cry into the money I made.

Best of luck

MYDX and NBEV - Admitting bad calls....

I haven't been shy about patting myself on the back here when I've written a bullish opinion on a stock that then goes on to make substantial gains.  I've had a number of successes.

The Bullish Calls

I first wrote about LAC.TO at $0.75 CDN and it is now trading for $1.06....I long ago took profits on that stock at lower prices than where its trading now, and when that happens I simply cry into the money I made.

http://www.avoidthebag.com/2016/04/lithium-americas-cup-and-handle-forming.html

EGT.V is one I wrote about at 14 Canadian pennies.  I bailed on it after doubling my money but its still trading up around 25 cents.

http://www.avoidthebag.com/2016/05/the-lure-of-clean-energy-eguana.html

HMPR, which is now trading as XBKS after a merger is one I'm particularly happy about, and while I have taken profits by selling some shares its one I continue to like and have maintained a position in.
It was trading at a split adjusted price of $18.10 when I first wrote about it here, now its at $26.50 after pulling back from as high as $30.

http://www.avoidthebag.com/2016/05/hampton-roads-bankshares-hmpr-great.html

RVX.TO is a stock I first wrote about here when it was trading around $1.30 CDN, its currently at $1.75 after getting up around $2.50 in October and is one I still continue to both like and hold, however fully ackowledging that it is extremely high risk in my view.

http://www.avoidthebag.com/2016/06/resverlogix-phase-iii-clinical-trial.html

ACU.V written about at .16 cents now at .185 is one I doubled down on when it fell to 10 cents.  I took some profits when I climbed up over 20 cents, but I still am maintaining a position and still think there's much more upside potential.

http://www.avoidthebag.com/2016/07/the-lure-of-green-energy-aurora-solar.html

In October I expressed a bullish opinion on RMHB when it was trading around .036 cents American. Now it has climbed to .092....it is another one where I'll have to cry into the money I made, bailing on it after a 50% profit.

http://www.avoidthebag.com/2016/10/hemp-infused-beverages-intriguing-idea.html

KUB.V has been a monster, I wrote about it in October as well when it was 2 cents...and now its settled in around 6 cents after trading as high as 7.5 pennies CDN.  Its one I continue to hold, in fact I just added to the position I started at 2.5 cents by buying more at 6 cents.

http://www.avoidthebag.com/2016/10/an-intriguing-penny-play-kubv-ukranian.html

Not too bad at all, and I'm leaving out more recent gainers like Emblem Corp.

Of course not all my calls were long plays.  I did express bearish views at times when I thought some stocks were bubbling up on nothing more than Promotion, News and Hype.

The Bearish Calls
I wrote a few bearish opinions on ZIOP starting last May when that stock was trading in and around $7 to $8 per share, now its sitting around $5.50

http://www.avoidthebag.com/2016/05/ziopharm-wall-street-sting.html

I did a couple posts on KTOV also in May when that stock was trading up around $6.60 per, now its fallen all the way to around $3.

http://www.avoidthebag.com/2016/05/ktov-what-just-happened.html

And then there's VUZI when it was up at $8.81 on its way to almost $10.  Now its fallen all the way back to $6.40

http://www.avoidthebag.com/2016/09/vuzix-time-machine-back-to-tech-bubble.html

And finally my very recent bearish thoughts on NF.CN from November when it was up around 25 Canadian pennies and on its way to being promoted to over 30 cents.  Its now trading for 11 or 12 cents and in my opinion on its way back to .02 cents eventually.

http://www.avoidthebag.com/2016/11/message-board-fun-and-games-with.html

But enough of the successful calls, I didn't get them all right last year and I am sure I will get some wrong in the future.  Two opinions I expressed were particularily bad, one long idea and one short.

MYDX is a company I wrote about this past November and one I took a position out in.  When I wrote about the PPS was trading for 2.2 cents, and I bought into at .0144 as revealed in the comments. Its most recent closing price was .0021 for a drop of over 80%.  Ouch!!!  Thankfully it was a small position, and I followed my own advice in that post and only risked money I could afford to lose.

http://www.avoidthebag.com/2016/11/mydx-another-way-to-play-marijuana-space.html

I will continue to hold MYDX (the symbol and company name are one and the same).  The company is forecasting profitability in the near future, I'm not going to hold my breath however.  A good recipe for going broke in my opinion is to believe the forward looking bullish outlooks on penny stocks. I've already booked some solid capital gains in 2017 and losses can come in handy at tax time, even if the dollar amount is small.

The bearish short opinion was expressed on NBEV, back when it was trading under the symbol ABRW.  I wrote about that stock in June of last year when it was trading up around $1.75 cents after already made a huge jump from as low as .20 cents in February and March.  Today its trading up around $4.20 and has been as high as $5.50

http://www.avoidthebag.com/2016/06/abrw-great-example-of-stock-promotion.html

My opinion on NBEV hasn't changed for the long term, but I have to admit I was wrong.  The ultimate arbiter in the market is price, and I thought NBEV had been pumped up near its limits in June, so I was incredibly wrong on that one as well.

When I get it right I'm not shy about sharing my success, but that means I have to take ownership of those views and opinions I get wrong too.  Some social media posters talk with extreme confidence when pumping and bashing stocks because they know sheep will follow strength, and admitting to past failures or the possibility that a call could be wrong, well that doesn't inspire confidence, and pumpers and bashers in my opinion (one that is often not humble) is that most are industry hacks.

Professional market players infest social media sites where stocks are discussed, that's opinion but for me its not up for debate.  The way I see things they are manipulators and bullies, trying to dominate the herd so as to shepherd the sheep into the stocks they're dumping, or out of the ones they want to accumulate.

I'll end this post here and wish everyone luck.  I will also once again cite those two maxims that I think are of critical importance to retail investors.  Firstly that nobody has ever gone broke from taking profits, and secondly that if you sell a stock and then see it continue climbing even higher, before buying back in cry into the money you made and think again about that first maxim.

Cheers.

Aurora Solar (ACU.V) explodes higher on LG Electronics news

Many commentators write about the importance of timing the market.  But sometimes its not so much about timing, but rather of "time in".  I first wrote about ACU.V back on July 18th of this year, just shy of five full months ago.  At that time ACU was trading around 15 cents:

The lure of green energy - Aurora Solar Tech (ACU.V)

In that posting I expressed a bullish opinion that was based on a near total absence of Promotion, News, and Hype.  On top of that I really liked the way the chart was setting up.  I saw a base pattern in the 14 to 15 cent range and had started a position at 15 cents and speculated that the stock might be undergoing smart money accumulation, that is to say big market players buying low while things were depressed and quiet.

Not long after I wrote that blog posting, the PPS fell to less than 10 cents, so much for timing.  I did take advantage of that drop and added the exact same dollar amount as I had bought at 15 cents, thus lowering my cost average to 12.5 cents, but at 9 or 10 cents I was still underwater.  

In Sept/Oct/Nov the PPS did recover, getting back up around 15 cents before settling in and around 13 pennies.  That is until December 13th when the company released news about an order from LG electronics.  

https://ca.finance.yahoo.com/news/aurora-solar-technologies-announces-volume-130000686.html

The two sentences of news contained in that release seems to have been the cause for an explosion in both the PPS as well as volumes.  ACU traded more than 8 million shares over the last two days and the PPS climbed from 13 to 19 cents after reaching an interday peak of 21.5 cents.  

Regular readers know my favorite saying, nobody has ever gone broke taking profits.  I myself sold 10% of my holdings today at 20 cents, 60% gains are nothing to sneeze at.  But I think there is potential for even more upside here.  With that being said, ACU has moved up in a fast and furious manner, so it would not be unreasonable to expect a pullback.

Do take note of the 50 and 200 day moving averages (simple), the 50 is taking dead aim at crossing over the 200, which is called a Golden Cross among devotees of Technical Analysis.  A Golden Cross can be seen as a potential harbinger of a clear sky break out to a new and higher trading range. Assuming ACU.V does break out even higher I think it is reasonable to expect resistance in the 30 to 35 cent range where the PPS traded for a long time over the past several years.

As noted in a blog posting I just did on short interest on December 5th just past, ACU.V only had 2,000 shares sold short current up to November 30th.  However back in August that number did shoot up over 100K, which in my opinion was quite likely an effort to "shake the tree".  For those unfamiliar, shaking the tree involves shorting a stock in an effort to shake free shares from overly nervous and price sensitive retail shareholders.

If it happened before it can happen again.

Do note my opinions are biased as I am a shareholder and ACU does represent a highly speculative stock, that was true at 10 cents, at 15 cents and is equally true at 19 or 20 cents.

Good luck

Short Interest update on (RVX.TO) (ACU.V) (KUB.V) And other thoughts

I have written often about the reasons I view short interest as an important part of my research. Short interest is of course fundamental data, but rather than being weeks or months old, with the Canadian listed stocks I hold I am able to get updates twice a month, and when the new numbers come out its only 3 days old.  

I've shared these views before, but I believe they bear repeating.

In my younger days I viewed bears as an enemy to be defeated, I dreamed of short players being forced to cover off large positions resulting in a squeeze play that would send a stock sky rocketing. I long ago consigned that view to the trash bin.  My older and wiser self knows that it is never wise to underestimate an opponent, that holds true on the battlefield, in a sporting arena and with the public equity markets.

Short selling comports huge risk.  When going long the amount that can be lost is fixed, if you buy 10,000 shares of a stock trading for $1 the most you can lose is $10,000 because a stock cannot drop below $0.00.  

But go short 10,000 shares on a stock trading for $1.00 and the potential for losses is theoretically limitless.  Those 10,000 shares borrowed and sold into the market at $1.00 have to be bought back on the cover, unless the PPS goes to $0.00 in which case the short seller books $10,000 in profits less fees.  

But if the stock climbs, then the potential for losses climbs.  At $2.00 a short seller is down $10,000 at $3 he's down $20,000....and keep adding $10,000 for each dollar the PPS climbs.  And if  the stock keeps climbing, then the short seller must keep putting money into his margin account to protect his short position.  

If the margin requirements are not met then he can be forced to cover.  Can you imagine being short 10,000 shares at $1 on a stock that goes to $10?  The short seller could be forced to buy back his short position for $100,000 when the short sale only netted $10,000.

It is because of this kind of risk that short sellers like Hedge Funds are notorious for going full tilt on their research and due diligence, with reports of some even combing through the trash of public companies to get the inside scoop.  And it is because of this that I now stay away from investing in companies that have a significant number of shares shorted, say 10% of the outstanding or more.

Of course there are a couple other reasons for going short.  One is fairly benign.  Market Maker broker dealers (MMs for short) that are quoting a bid and ask have an essential function in the market, they provide liquidity.  A lot of stocks out there are thinly traded, but because of MMs those looking to buy can always find a seller, and those looking to sell can always find a buyer.  Because of this essential function MMs can end up short, not because they're bearish on a company but simply because they got hit with buy side interest when no sellers were available.

The other reason is less benign, its sometimes referred to as shaking the tree.  A major player can work a stock up and down by using short selling when a stock hits the top of his buying range.  This can increase volatility and cause some longs to bail out, allowing the big player to accumulate a large position, covering off his short sales and then adding to a position.  In this way short selling can actually be seen as a positive.

Alright, that's enough preamble.  Now onto the three stocks mentioned in the subject line:  RVX, ACU and CUB all traded in Canada.  I have written about all three before here at ATB, and both RVX and KUB are up significantly since I first profiled them here, while ACU is down a couple of cents. 

Please note that I have long positions in all three of these stocks so my opinions are biased and should be viewed in that light.  

Resverlogix: RVX.TO or RVXCF OTCBB

Up to November 30th 2016 shares shorted is listed at 107,542 which represents 0.10% of the 105 odd millions shares issued.  You would have to go all the way back to July of 2015 to find a higher number.  As recently as May of this year the number was just 1,500 and it has been climbing almost non stop ever since, but only incrementally, one tenth of one percent of the outstanding is hardly a massive number.

With RVX I consider it very possible that short selling is being used as a means to "shake the tree", to push the PPS around in other words in an effort by smart money players to accumulate on a long position.  

The company just put out news today (Monday December 5th, 2016) announcing a second positive recommendation from the Data and Safety Monitoring Board (DSMB) for the continuation of the company's Phase III trial of Apabetalone called BETonMACE.  The first patients were dosed over a year ago now and the DSMB noted no safety or efficacy concerns and recommended the trial continue without modifications.  

BETonMACE is attempting to show that Apabetalone will reduce the incidence of Major Adverse Cardiac Events (MACE) in patients suffering from Diabetes Mellitus, which is a fancy way of saying full blown insulin dependent Diabetes.  

Here's a link to that news:

http://finance.yahoo.com/news/resverlogix-announces-second-positive-recommendation-171300385.html

Aurora Solar Technologies: ACU.V or AACTF OTCBB

Short interest for ACU is so low it might as well be 0, although the actual number is 2,000 current up to November 30th 2016.  That's only 0.01% or one one hundredth of one percent of the roughly 39.6 million issued shares.

Trading in this stock has really thinned out, and there hasn't been any news of any consequence since October when the company announced a repeat order from one of their customers.  

Cub Energy: KUB.V or TPNEF OTCBB

KUB on the other hand does have some short selling going on, like RVX not a huge amount by any stretch, but enough to be noteworthy in my opinion.  Up to November 30th 2016 the number comes in at 146,400 which is 0.05% of the roughly 312 million issued.  

Again, its not a lot, and as with RVX I consider it very possible that short selling is being used as a means to shake that proverbial tree in an effort by some smart money players to accumulate.  Back in October the number climbed over 200,000 but then came down in subsequent periods to just 23,000 and then 16,000 before this most recent update took it back up to 146,000.

Cub Energy has basically no news, the last PR of any note was on November 16th when the company released its 3rd quarter numbers.  And unlike RVX and ACU volumes for KUB are much more robust, it has traded at least 1 million shares per day over the past 4 sessions and traded over 14 million shares on November 17th, the day after they released their quarterly results.  November 17th saw the PPS close at 3 cents, the most recent close was 5 cents and that is just .005 from the 52 week high.

Summary

Taking everything into account I think RVX presents the biggest possible upside if they succeed with their Ph III trial, but it could be a long wait and there is a big risk that their trial could ultimately fail.

ACU appears to be a stock that is drifting right now.  Its a stock that has seen significant volumes taking place in quick bursts every two to three months, the last one being in late October.  If the pattern holds it would be January or February before the next one.  However I have to wonder if the election of Donald Trump hasn't taken some of the wind out of the sails in the New Energy space.

KUB I believe presents the best prospects in the very near term, that is based on the chart, on the fact there is precious little news, no hype and zero promotion that I can find.  Should those elements come into play I think there's a great narrative here given that Cub Energy is focused on the Natural Gas market in Ukraine, and with the conflict in that region subsiding I very much like the chances of KUB.V returning to the levels it was trading at back in 2013, that is in the 20 to 30 cent area.

Comments are always welcome, just keep the language polite.  

Sunday thoughts on when to sell....

Its Sunday again, time to sit back and relax and consider those things in the market that daze and amaze, astound and confound.  The things that both thrill and send chills down the spines of retail investors.  Today I'm going to write about selling, not just any selling though....about selling after you've made profits.  

I've put forth some long ideas here at Avoid The Bag that have made some nice gains:

Lithium Americas at $0.75 cents CDN now trading over $0.90 with  gusts up north of a dollar.  

http://www.avoidthebag.com/2016/04/lithium-americas-cup-and-handle-forming.html

Eguana Tech when it was $0.15 CDN now trading around $0.30   

http://www.avoidthebag.com/2016/05/the-lure-of-clean-energy-eguana.html

Xenith Bankshares (pre-merger when it was HMPR) at $1.81 now trading for $2.26.

http://www.avoidthebag.com/2016/05/hampton-roads-bankshares-hmpr-great.html

Resverlogix at $1.25 CDN now trading at $1.53

http://www.avoidthebag.com/2016/06/resverlogix-phase-iii-clinical-trial.html

I also wrote about Aurora Solar at $0.15 CDN and it is currently trading for 10 northern coppers: http://www.avoidthebag.com/2016/07/the-lure-of-green-energy-aurora-solar.html

Four out of those five stocks that I've written bullish opinions about are green, which means there is the potential for profits.  Not bad....gains are good, but until those gains are crystalized by selling, there is no profit.  

My legion of loyal fans (all three of them) have probably come across someone who's owned a stock that dropped in value and heard them say something like:  "Its not a loss until I sell".  And that is true, but it also works when a stock climbs.  There's no profit made until the shares are unloaded. Paper gains and paper losses are notional and only become real once a stock is sold.

But selling is hard, and I will suggest it can be even harder after big gains than after a stock has dropped.  Why?  Psychology, and the triumvirate of emotions that seasoned market players know oh so well: Fear, Uncertainty and Doubt....or FUD for short.

FUD doesn't just rear its head when a company's stocks falls, it also pops up after a stock has climbed.  You've bought my favorite hypothetical stock ABCD at $1.00 per share when things were quiet and volumes were light.  You've read all the filings, the PRs, all the industry stories related to ABCD, you even know the histories of the CEO and other board members.  

Then ABCD starts attracting attention, volumes pick up....it getting mentioned in social media. The PPS starts climbing, to $2 then $3....before you know it ABCD is trading at $5 per share and you're sitting on a 500% paper gain.  Its not a capital gain though because you haven't sold.

And here's where FUD kicks in.  Let's say you bought 5,000 shares for an initial investment of $5,0000....and now those same 5,000 shares are worth $25,000 for a paper gain of $20,000 if you sell. But things are obviously going well now, better than they were when you bought shares at $1. Maybe there's analyst coverage, or a newsletter has picked up ABCD and is touting it to its readers. Those storming into ABCD are all over social media with predictions of $10 and $20 valuations to come.

What if they're right?  What if ABCD does go to $10...or even $20.  Those 5,000 shares could be worth $50,000 or maybe even $100,000 for monster gains in other words.  A new car, a bigger and better house....that dream vacation.  Sure $20,000 profit is incredible, but damn!  Won't you be kicking yourself if you take $20,000 when you could have had $95,000 in profit?

Time to take a deep breath.  A lot of people start investing with the goal of making huge "life changing" returns.  The stock market is the epitome of the Dream Factory.  And people do fall in love with their stocks, digesting every tidbit of news and opinion that hits the internet.  Whether its something from a respected analyst, a Seeking Alpha or Motley Fool author, or some moron like me with a blog.

I will suggest that you consider, when a stock has made big gains, whether or not its a profitable company.  Of the five stocks I mentioned at the beginning, four of them are not....

Lithium Americas is a junior mining company developing a Lithium mine in Argentina, Eguana makes inverters for battery storage power systems, Resverlogix is trying to develop a drug that will reduce major adverse cardiac events and Aurora is in the solar panel space.  None of these four companies is profitable.  Only Xenith Bankshares has actually achieved positive earnings.  

Next I will suggest you look at recent volumes.  Has trading in the stock exploded or is the PPS climbing higher and higher on light volume?  I have a rule of thumb, if between 5 and 10% of the float trades in a day, I start thinking about looking for the exit.  And that is doubly true if higher than historic volume happens in tandem with lots of Promotion, News and Hype.  Especially when its a company with a history of using shares to fund operations, pay salaries and keep the lights on.

My ultimate goal with this blog is to help retail investors understand the forces at play.  And I will suggest that these forces are most active when a stock has made big gains.  The goal of the industry players, in my opinion, is to get retailers buying when stocks are high while the true professionals sell.  And if a retail player is lucky enough to have bought in early and is sitting on big gains, to keep that retailer holding tight.....to fall in love.

I'll end with my favorite piece of market wisdom:  Nobody ever went broke taking profits.  And if the stock you sold at a profit keeps climbing, and you miss out on even bigger gains?  Then cry into the money you made.  

Good luck

Musk's "Master Plan" - The Green Energy Paradigm

Tesla CEO Elon Musk has just come out with his updated "Master Plan".  If you're reading this practically invisible and pathetic little blog then you already know the details.  

Its a new world.  We're all going to be driving electric cars, have solar panels on our roofs and battery storage systems in our homes.  Okay, but is it realistic?  Are we going to do away with fossil fuels and be living on a cleaner planet in the decades to come?  

There's no way to know for sure, the master plan doesn't include the building of a time machine. With that being said, I like the chances.

Someone born in the year 1900 would have had two major forms of transportation, by foot or by horse.  For those fortunate enough to have the means to travel the world there were steam powered ships and coal fired trains.  Cars and planes were still dreams in the planning stages, but they were dreams that came true. Within fifty years cars were everywhere, suburbs sprang up and ribbons of pavement crisscrossed the landscape.  Intercontinental travellers were spared the long journeys across oceans as commercial air travel started flying people all over the world.

The new paradigm?  Clean energy stored in Lithium Ion batteries running our homes, our cars and pretty much everything else.  

When cars first came out some thought they were a fad, that the old reliable horse and buggy would never be replaced.  The same thing happened when cell phones hit the market, some people said that there would always be a need for a hard wired phone in people's homes.  

The world changes, and when the change is big its sometimes called a paradigm shift...that's what Mr. Musk is suggesting.  I think he's right.  

Will companies like Tesla combined with Solar City (assuming the merger goes through) lead the charge?  Maybe, maybe not.  There were a lot of car makers that were big at the start, and many of them were absorbed or disappeared.  Does anyone remember the Packard?  Same thing with cell phones, companies like Nokia and Motorola were the early leaders, long before Apple and Samsung.

Investors hoping to cash in on the changing landscape have a multitude of choices.  Aside from the aforementioned Telsa (TSLA) and Solar City (SCTY) there are lithium miners, manufacturers of battery storage systems and their associated components, solar panels and wind turbines....and much more.

I've place a few bets, these aren't recommendations, there are plenty of publicly traded companies to choose from.  I've put money into Lithium Mining with Lithium Americas (LAC on the Canadian TSX) and into battery storage and the inverters needed to integrate them into power grids with Eguana Tech (EGT on the Canadian TSX Venture) and a company that works in the solar panel space called Aurora Solar Tech (ACU also on the TSX Venture).  For those seeking less risk the Global X Lithium ETF might be an option.

In my opinion the Green Energy sector is just starting to grab investor attention, and I don't think the party will be ending any time soon.  And with Mr. Musk's ability to grab the spotlight, this updated master plan will be getting lots of play and chatter over the coming news cycle. 

The lure of green energy - Aurora Solar Tech (ACU.V)

For anyone who is new to this blog expecting to see a bullish write up on ACU.V with lots of fundamental information and projections of monster growth potential and all that other stuff you typically see on stock promotional sites.....you're probably going to be disappointed.

That's not my style.

Stocks are risky, and the risks with penny stocks are even greater.  So are the rewards of course, but you have to be careful.  Typically penny stocks get promoted and pumped after they've already made big gains, when volumes are spiking and there's lots of news out to get the retail herd excited and buying. Social media sites and message boards become filled with pumpers

If that's what you're looking for, then you should probably move on because ACU.V doesn't qualify. Volumes are thin, on the Canadian TSX Venture exchange average volume for the past 3 months is 73,782.  For a stock trading in and around the 15 cent mark that's only about $11,000.00 changing hands on an average day.

Those who've been reading this pathetic and nearly invisible little blog, or if you followed me at other sites like SeekingAlpha (Joe_Retail) StockTwits (growacet) Stockhouse (ledrog)....this should all be very familiar.

My view on stocks in general, and with penny stocks in particular....is that if you're hoping to make big gains, then you have to get in BEFORE the herd shows up, BEFORE social media sites and message boards light up with pumpers screaming BUY BUY BUY!!!  If a SeekingAlpha contributor with thousands of followers starts talking about a penny stock as a "Great Investment", or touting a price target that would translate into a 500% gain...Then you're likely going to find a stock that's already jumped 500% or more with a lot of the upside potential already realized in my opinion.

As far as fundamentals go, my opinion (hardly a unique view) is that they are already "baked in" to the PPS.  There are three fundamental realities I DO NOT WANT to see.  They are what I consider to be the Unholy Trinity, they are: Promotion, News and Hype.

• Promotion is used to get investors watching a stock, putting it on a watch list
• News comes out and because of Promo gets read by the retail herd
• Hype hits the picture when the PPS starts moving, with the sheep convinced the prospects must be good because the share price is climbing

Regular readers already know that there are two sides to a trade, a buyer and a seller.  If the herd is being whipped into a buying frenzy, then there have to be others willing to part with their shares at the higher prices.  That's the market in a nutshell, and its the reason some players are able to buy low and sell high while the retail players often end up on the wrong side of the trade, buying high instead of selling high.

Do I think this will happen with Aurora Solar?  I don't know to be honest, but I do think its possible. If it doesn't I still think ACU.V is a better risk than buying into a penny stock that's already gone from 10 or 20 cents to $1 or $2 on lots of the aforementioned Promo/News/Hype.

Why do I think its possible?   The first reason is right there in the subject line, the lure of green energy.  This sector is heating up, and I don't see it calming down anytime soon.  Stories of global warming and the need for Green Technology and Energy are all the rage.  Tesla and Lithium batteries have caught the attention of investors, 

Interest in Lithium stocks spiked around 2010 before cooling off, now many Jr Lithium miners have seen their share prices explode over the past year.  Could the same thing happen with Solar?  No way to know for sure, but I do see the potential.  I've started getting emails touting Solar energy plays as a new "Golden Oil".  

And who knows, maybe Aurora Solar with execute on their business plan and become a major player in this sector.  They're actually not a maker of solar panels, instead they produce measurement and control solutions to help manufacturers improve yield, lower costs and achieve higher margins.

They recently announced (May of this year) an MOU with an unnamed "major solar panel manufacturer".  When it comes to news I'm something of a cynic, and a MOU is not a signed contract. But I doubt this news was read by many investors given the lack of promotion currently going on.

A big thing to look for with penny stocks in my opinion is financial strength, or weakness as the case may be.  With a 15 cent penny stock I'm not expecting profits or a robust balance sheet obviously, but I do want to know that a company has sufficient cash on hand to fund operations into the foreseeable future.  Aurora recently released news about a Private Placement which brings in about $775,000.00 which satisfies that criteria for me.

I also want to know how many shares have been shorted.  If there are bears placing big bets on the short side, that for me is a definite warning sign.  Shorting is incredibly risky, and with penny stocks the risks are even bigger.  With ACU the short interest might as well be zero, its only 2,000 as of June 30th 2016 or just .01% of the 33.2 million issued shares.

Finally there is the chart.  Frankly and unapologeticly I love it.  That doesn't mean its a slam dunk sure thing.  Sure things do no exist in the stock market, anyone who says otherwise about any stock is an obvious pumper.  But in the ACU.V I see a lot to like.

The stock has been trading in the 14-16 cent CDN range since the start of June, and back as early as May if you discount one short lived spike up to .20 cents.  In other words its trading close to its historic lows and I like to buy low, not high.

I include 3 moving averages, the 20 (near term) 50 (mid term) and 200 (long term).  At 16 cents the PPS would be above both the 20 and 50 dmas.  MACD (Moving Average Convergence Divergence) is just a hair below the 0 line.  I would see a break above that zero mark as a bullish technical signal. And stochastics, the fast line (black) has turned bullishly upwards and has crossed over the slow line (red) from an oversold position at the 20 line.

Finally OBV which stands for On Balance Volume.  OBV counts a day's volume as positive (+) when the PPS climbs and negative (-) when the PPS falls.  The OBV chart gives an indication of accumulation from April/May forward.  Given the lack of Promo/News/Hype I consider it possible that those who have been buying, that they might be what I like to call the "smart money crowd".

That's it folks.  I've taken out a position in ACU.V so my opinions are obviously biased.  If you want to look at the US side the symbol is AACTF with Aurora trading OTC Foreign.

To sum up my reasons for being bullish and why I view Aurora as having a good risk reward profile:

• Thinly traded and near its all time lows
• Only 33.2 shares issued as per stockwatch up to June 30th 2016
• No discernible Promotion or Hype and very little News
• A chart suggesting the possibility of accumulation
• In a hot sector (Green Energy) 

Good luck, and remember...if ACU or any stock makes gains for you...nobody ever went broke taking profits.