It won't be right if we say that penny stocks are all frauds. There are also some stocks that are run by good companies. But it also can't be denied that some scammers create a wrong publication of their stocks. They purchase a stock and then hype it up by sending out positive e-mails and internet ads causing the price of the stock to jump. They act as if they knew this is the next stock to rise. Spammers will sell at a net gain when the price is up, leading to fall in price. Thus victimized investors suffer a lot because the price doesn't rise in future. Still there are many investors who have won huge money from this business. Therefore one thing can be told in this matter that turn to your own research about the company before going for penny stock investing.
According to market report recap of penny stock investing, there is adequate liquidity in penny stocks. Liquidity means having enough volume to easily buy and sell your shares.
Finally it can be told that nothing is a sure thing in penny stock investing. So the stock you were in completely went down the drain. Face it, these kinds of surprises can happen. There is no chart or analysis out there that can predict a stock tanking sometimes.