Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Caution - Today's Heavily Promoted Penny Stocks Include ROSV, NTRO, IDOI

The penny stock pumping of Nitro Petroleum, IDO Security, and Rostock may have actually obscured an otherwise solid company.

Though the rising market tide has lifted all boats/stocks, it still hasn't negated the practice of artificially pumping up a stock's demand. Promoters - some paid and some not - were out in full force today for penny stocks Rostock Ventures Corp. (ROSV.OB), Nitro Petroleum, Inc. (OTCQB:NTRO), and IDO Security Inc. (OTCPK:IDOI). Since there's occasionally some substance behind the hype though, here's a closer, unbiased look at each one.

The pumping e-mail on Rostock Ventures Corp. (ROSV) was classic, even by gold stock standards...

"Rostock just announced they are initiating a work program on their wholly owned gold prospect the McVicar Gold property.  Everyone knows how expensive gold is and the popularly of the actual resource.  It's not very often where you find a company that owns 100% of the property.  Even Barrack Gold Corp only owns 60% of their popular Nevada based Pueblo Viejo mine."
OK, everyone may know how expensive gold is, and everyone may know it's popular. Not everyone, however, assumes anymore that being a gold miner inherently means it's a penny stock you'd want to own. ROSV is just another gold play... one of hundreds, most if which are crap.

And just for the record, there is nothing abnormal with 100% ownership in a mine property. Barrack Gold may only own 60% of the Puebla Viejo dig, but they may own less of others, and more of still others.

ROSV is simply a coin toss despite the move from $0.00 to $0.37 in its first three weeks of trading. If the company finds gold, it's a win, but there's no in between.

Sign-up for Free to Receive Future Commentary
and Trading Alerts on NTRO, IDOI, and ROSV.


Nitro Petroleum, Inc. (NTRO) was hoping that news of the company's remedial upgrades for Mason Burns # 2 and the Teresa # 1 wells would spark some interest in the stock, but no such luck.... the penny stock fell from $0.032 to $0.03 (a 6% dip).

In fact, the strength of the downside reversal despite the pumping effort is quite alarming.

Between today and yesterday, we're seeing what's called a bearish engulfing pattern for Nitro Petroleum shares. That just means that today's open and close were above and below yesterday's entire range - a hint that we've just witnessed a major shift in momentum. 

It's bearish for the obvious reason - it moved from high to low today.

Though technical analysis doesn't always apply well to penny stocks, in this case, NTRO has enough liquidity to take the hints at face value.

The market didn't fall for the IDO Security Inc. (IDOI) pumping effort either.

IDO Security manufactures an x-ray machine used to scan shoes at airport security checkpoints.  The device is already being used by various airports around the world, and its popularity is reportedly growing for two clear reasons - it speeds up security checks, and prevents the unsanitary practice of taking your shoes off at an airport.

It's actually not a bad idea. It's just too bad it had to be tainted by a handful of hard-core penny stock promoters. At least the message about the company was spread though.

From a trading perspective, IDOI has probably seen its bets days and most explosive gains. Now most of the buyers are most likely the second-chancers who wish they'd gotten in before the July rally.

For that reason, it may be best to let this penny stock fall back and regroup before jumping on board. Based on how well it performed last month though, it shouldn't be too hard to recreate the IDOI frenzy with a little good news.

If you'd like to know of any changes in our opinion of these three penny stocks (or if we officially recommend them as trades), be sure to sign up for free newsletter today. It's delivered 2 to 3 times per week.