Contact theSOPAbout theSOPSupport theSOPWritersEditorsManaging Editors
theSOP logo
Published:November 8th, 2011 11:15 EST
Raystream (RAYS) Gets Annihilated As Predicted by

Raystream (RAYS) Gets Annihilated As Predicted by

By Seth Davis

Investors of Raystream (OTC:RAYS) had a nasty shock on Monday as the stock dropped nearly over 48% in one day. RAYS was the latest promotion from the infamous parties that previously pushed LEXG, which saw a runup of under $1 to over $10. Unfortunately, RAYS did not enjoy this level of success and lasted less than one month before collapsing.
With RAYS having now fallen far from its highs, many naive investors have lost a lot of money. But there were warning signs all along. Leading penny stock newsletter Penny Stock Videos had warned their subscribers as far back as mid-October about buying the stock, while the prominent penny stock trader Timothy Sykes had later written a blog post diving into the details of why RAYS is "the biggest penny stock scam right now."
As the PennyStockVideos email sent on October 13th explains, Raystream was involved in the business of online video compression technology. Advertisements for the companies stock touted it as a revolutionary market leader that could very easily be brought out by various industry giants, which have been accused of being extremely misleading. Raystream owned no significant patents and had very limited cash and assets.
A look at a one month chart of RAYS shows a mostly gradual runup all the way up to $2.50, followed by a drop to $2.20 and a rebound back close to $2.50. When the stock failed to break resistance at $2.50, technical chart analysis would suggest that the odds favour a drop. A breakout past this key technical resistance level, on the other hand, could be a strong buy signal.
In order to find strong penny stock companies that are worth buying on their own merits, beginners to investing are encouraged to join the newsletter, which supplies free video lessons and stock alerts.