Well, here were are again delivering the same ‘take profits’ message for Applied DNA Sciences (APDN). If my count is correct, this is the third time in four months we’ve done so for this penny stock. That’s fine by us (and hopefully you), since each exit has reaped a triple-digit reward.

If you’ll recall what we said when we suggested a re-entry back on May 14th, we were only looking for a move to 22 cents from what started at a low of 8 cents (APDN was at 11 cents on the 14th). Yesterday, Applied DNA shares peaked at 21.1 cents, and don’t seem to want to follow through. We’ll take it.

As much as we’d like to see this stock soar to 30 cents or more, it’s just not that kind of stock yet. It’s still a ‘trading’ stock, and is still moving with a fairly predictable ebb and flow. The next time around, the ‘ebb’ should be a higher low, and the ‘flow’ should be a higher high. There’s no reason to take the return trip lower though, when you’ve got profits in hand.

That said, we maintain this stock is indeed the kind of stock you can feel reasonably good about stepping into on its dips. The company has done a good job on the news/publicity side, and should continue to do well going forward. More important to us though, the stock responds to the news positively…. until it reaches an extreme reading (like now).

When will this penny stock no longer be a ‘trading’ stock and actually graduate to become an ‘investing’ stock? Not sure, but I think the answer is when the valuation ratios look more like the market’s averages. Right now, APDN ebbs and flows based on the expected revenue and earnings numbers from the future. When the future becomes the present, volatility should be reeled in.

Just to be clear, our sell recommendation has nothing to do with an opinion about the stock’s current or future value - this is strictly a trade based on the chart.

Bottom line - take profits, have a seat on the sidelines, and pick a better entry spot to get back into the stock.

Did you miss any of our entry or exit recommendations for Applied DNA Sciences shares? Stop throwing opportunities away. Sign up for the free Small Cap Network e-newsletter today, and we’ll let you know when it’s time to trade (buys and sells) all sorts of small caps and penny stocks.