If Revolutionary Lighting, like Superconductor Technologies, announces an equity-raise to generate more capital, the stock could easily get slammed. The other possibility is that swing-traders and daytraders are done with this stock and have trailing stops, which could cause a cascade of selling. This eventually could present a buying opportunity in the event of a plunge, due to the long-term potential of Revolutionary Lighting. But for now, a collapse in the stock price is more likely due to the big run-up in price, small number of shares being traded and overvalued fundamentals.
-- Written by Ben Brinneman in Charlotte, N.C., owner of C Squared Trading, which teaches how to trade legitimate "penny stocks," priced between $2 and $10.
At the time of publication, the author held no positions in stocks mentioned, although positions may change at any time.This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.