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Technical analysis (TA) involves the careful study of a stock’s chart patterns and trends. Although this set of skills may seem daunting at first, even beginners can incorporate a few select TA methodologies into their investing strategy to great success. TA can be especially helpful when predicting the movements of penny stocks because of their volatility—provided there is enough trading volume to back up the patterns you’re trying to find.
Below, you’ll find a list of some penny stocks with interesting technical setups. Remember to move quickly and exit your position if the stock isn’t behaving how you expect it to, because this may mean that the trend or signal has changed or failed.
Some of the setups described below may no longer be relevant or intact as of when you read this article. Please conduct your own due diligence. Many stocks mentioned here were also discussed in the Peter Leeds newsletter. Leeds may own shares in some of the investments mentioned, in which case that fact will be clearly indicated. Please note that penny stocks are notoriously volatile.
New Stocks to Watch
Vicinity Motor Corp. (VEV)
One of the most bullish candlesticks that can appear on a stock’s chart is the white marubozu—and that’s precisely what popped up on Vicinity Motor Corp.’s (VEV) trading chart as of the end of February. This could mean that the group’s shareholders will have a very positive month ahead of them, after an already strong February in which the company saw a 23% boost in value.
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Gold Royalty Corp. (GROY)
Gold Royalty Corp. (GROY) capped off the month of February with a spinning top candlestick, which looks like a cross and suggests investor uncertainty or a roughly even number of bears and bulls on the stock. In many cases, after a period of downturn, this uncertainty tends to lead to a bullish trend reversal.
A multiple bottoms pattern may also be forming around the $4 level. If Gold Royalty stock is able to soar from here and climb past the resistance level around $5.15, then we could see much higher prices over the next few months.
TradingView.com
Aeva Technologies, Inc. (AEVA)
At the same time as Aeva Technologies, Inc. (AEVA) was witnessing a 52-week low in its share price, it also recorded a relative strength index (RSI) of 26.43. This suggests that the stock is deeply oversold at its current price and could see a turnaround in the near term as the disappointing earnings are digested by the market.
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Dynagas LNG Partners LP (DLNG)
The hammer candlestick posted at the end of February by Dynagas LNG Partners LP (DLNG), underpinned by strong relative trading volume at 15.81x, is a strong indication that it could see a bullish trend reversal—i.e., higher share prices—over the next month. Should these higher prices not appear over the next few days, however, the position should likely be exited.
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Penny stocks are volatile and can generate catastrophic losses. Price levels in this article are hypothetical and do not represent buy recommendations or investment advice. Keep in mind that it’s your responsibility to make trading decisions through your own skilled analysis and risk management.
Peter Leeds is the author of several books, including the international bestseller, Penny Stocks for Dummies. He and his team also issue a newsletter devoted exclusively to penny stock picks and analysis, as well as a popular YouTube channel, PeterLeedsPennyStock.
