Megola Inc. (MGON:OB) has something going for it that many other penny stocks don’t. Frequently low priced stock have catalysts that the common investor simply can’t grasp in order to buy the stock. Biotech penny stocks are a common example of this problem. Especially, when the PR’s try to explain products like cancer vaccines.
Well MGON claims to help solve a problem that many Americans are concerned with. The problem is the safety of products shipped to the United States. MGON has product line named HARTINDO that is supposed to be as safe non corrosive fire inhibitor.
On 10/26/11, Megola signed a Memorandum of Understanding with High Point Enterprises of China for licensing of MGON‘s Fire Inhibitor Coating. As always, you have to be skeptical of PR’s involving penny stocks and foreign companies. However, MGON has rallied sharply today, and shares are currently up 93.55% at 0.006 cents on strong volume.
MGON could also turn into a go to trading vehicle for speculative traders every time there is a new flash on defective or dangerous products from China being sold in U.S. stores. With it’s sub penny status offering the potential for large percentage gains.
MGON Stock Stays Risky
Fundamentally speaking MGON generates 366k in revenues, but only shows 1k in total cash with 87k in debt. The company also isn’t profitable.
On a technical basis, MGON has made large percentage moves like today’s as recently as a few weeks ago. So be careful not to get whipsawed in today’s action. MGON‘s chart is difficult to read because the moves have been so choppy. There is some resistance at 0.8 cents and a little more at 0.0085. As far a support goes, 0.0045 seems to be a level where some decent buying occurred, and if all else fails, today’s open of 0.004 cents could be used as a guide too.
For now just add Megola Inc. to your penny stock list. Keep in mind that while this is super risky name, the story of MGON could catch on with consumers and receive independent press coverage.