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It's Not Like I Didn't Warn You
August 29th, 2006
I told you on July 27 that "oil prices are due for a major pull-back." That pull-back has now started, less than a month later.
Why the pull-back, and how will this affect penny stocks?
First I'll answer the why. A risk premium was factored in to oil prices. Some of those risks do not seem like they will come to fruition. For example, hurricanes knocking out oil rigs in the Gulf of Mexico. Didn't happen, so suddenly oil prices look a bit expensive.
How will this affect penny stocks? On first glance, you might think that penny stocks involved in the oil and gas exploration and production world will take a hit. Yes, probably a little, if oil continues to slide (which I believe it will).
Yet, dropping oil prices will actually be good for penny stocks in other sectors. This is because people will begin to look for other hot markets, and other places to put their money as they get tired of the slow-death of their oil-based plays.
So where will the penny stock money flow? I'm betting on technology and and biotech. Unfortunately, the majority of people who invest in these sectors will lose money.
The trick is getting the "right" penny stocks, and this is especially true when dealing with tech. and biotech. That's where we come in.
Visit the penny stock professionals at PeterLeeds.com.