Take me to the future magic car!

Math blows, but I'm quickly finding out that I need it's super powers in order to find a good time to buy and sell stocks. The more I research, the more I find out that creating and reading charts on stocks is a key factor in making an educated guess on a good stock to invest in, and more importantly the right time to invest.

The most important chart I'm learning is the Moving Average Convergence/Divergence, or MACD for short. The internet is littered with sites and people more than willing to help you understand how to read these charts. This chart/ratio basically lets you get an idea of a stock's tendencies and current trend(s). The MACD is particularly helpful if you are looking at penny stocks. 

This leads me to the next stock I bought, which is essentially a penny stock (bought at 1.14 a share). It's a company called Zap, based out of California, but sells mainly overseas to China. They design, produce and sell electric and other advanced technology vehicles...like alternative energy automobiles, motorcycles, bicycles, scooters, personal watercraft, hovercraft, neighborhood electric vehicles, and commercial vehicles. Basically, they make lots of goofy looking vehicles that American's aren't quite ready to embrace, so they sell overseas.

Aside from the news that ZAP completed it's acquisition of 51% of the capital stock of Zhejiang Jonway Auto Co. Ltd. of Sanmen, Zhejiang, China to manufacture and sell electric SUVs to fleets in China, the MACD chart tells me that it is/was the right time to invest in Zap (ticker symbol: ZAAP). I've basically come up with/learned 4 rules to follow when investing in a penny stock, with the MACD be the most important:

1. Strong Price Movement- Large % price gains w/ heavy volume, a good sign.

2. Return On Equity- Positive ROE means company is turning a profit, which is what you want.

3. Technical Analysis Indicators- Reading the MACD chart for stocks current trend(s).

4. Insider Buying- When company insiders are buying the stock, it's a good sign.

Aside from gambling with a penny stock I also recently invested in General Motors(GM) and Gamestop(GME) for more long term, sound investments. What can I say, I like investing in the letter G. I guess Google and George Forman Entertainment can't be far in my future. But for now, its on to more pennies!!