Major benchmarks hit all-time highs in July, underpinning speculation in small-cap stocks and low-priced securities. Beaten-down market sectors such as industrial metals and brick and mortar retailers also perked up during the month, encouraging bottom feeders and swing traders to come off the sidelines. These bullish technical developments bode well for penny stocks into the Labor Day holiday, but traders should expect higher than average risk due to low summer volumes.

Biotech stocks shined during the month after major sector funds broke out of basing patterns in place since 2015. The relative strength of biotechs marks the start of secular uptrends that should underpin rallies at all capitalization levels in coming months. ImmunoGen, Inc. (IMGN) has continued to shine and has now grown by more than 70% since it was added to Investopedia's penny stock watch list at the start of June. It’s back for another month, with rising odds for continued upside into double digits. (Want to get better at trading penny stocks? Take our day trading course).

Careful stop placement often means the difference between an opportune profit and unexpected loss. This is especially true with penny stock plays because they often swing through higher percentage daily and weekly trading ranges than higher-priced securities due to wider bid/ask spreads and lower liquidity. As a general rule, it’s wise to place stops with these speculative instruments at the prices that, if hit, tell you the long or short trading strategies you’re using aren’t likely to work. Here are the penny stocks to watch for August 2017.

Penny Stocks To Keep Watching

1. ImmunoGen, Inc. (IMGN)

ImmunoGen, Inc. (IMGN) ended a long downtrend at the end of 2016, completing a double bottom reversal and taking off in a multi-wave uptrend that finished a breakout above resistance at the 200-day EMA. Four months later the stock broke out above the May swing high in mid-June and lifted to a 14-month high above $8.00 in early July. A pullback into mid-month dropped the stock into intermediate support at the 50-day EMA, generating a healthy bounce that could now test the prior high, ahead of continued strength into double digits.

2. RADA Electronic Industries, Ltd. (RADA)

RADA Electronic Industries, Ltd. (RADA) began to decline in the 1990s and continued to lose ground for more than a decade, finally bottoming during the 2008 economic collapse. A long-term recovery stalled at a 10-year high in 2014, giving way to intense selling pressure that broke the 2008 low in 2015. The stock remounted that level one year ago, setting off a long-term 2B buy signal that denotes the failure of bears to defend new resistance and continues to gain strength, with the current uptick targeting the August 2015 gap at $4.24

3. 22nd Century Group, Inc. (XXII)

22nd Century Group, Inc. (XXII) mounted 3-year resistance at $1.40 in 2013 and entered a steady advance that posted an all-time high at $6.36 in March 2014. The subsequent pullback gathered strength into 2015, dumping the stock back into the prior trading range. It found support near 70-cents in the second half of the year and tested that level three times, ahead of a March 2017 uptick that’s now reached range resistance. A breakout above $2.00 should attract strong buying interest that favors a high percentage rally back to the 3-year high.

4. Ballard Power Systems, Inc. (BLDP)

Ballard Power Systems, Inc. (BLDP) ended a multi-decade decline at 56-cents in 2012 and turned sharply higher, gaining ground in multiple waves that reached an 8-year high at $8.38 in March 2014. It built a double top pattern into the second half of the year and broke down, posting a long-term higher low at $1.07 in August 2015. The subsequent recovery wave reached new resistance at the breakdown level in April 2017, generating a 3-month symmetrical triangle pattern that could now yield a breakout and uptrend into the prior high.

New Penny Stocks to Watch for August

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5. Trilogy Metals, Inc. (TMQ)

The Canadian company Trilogy Metals, Inc. (TMQ) came public on the U.S. exchanges at $3.20 in April 2012 and entered an immediate downtrend that continued into January 2016’s all-time low at 15-cents. A recovery wave mounted the 200-day EMA at 60-cents three months later and stalled out, yielding a narrow basing pattern into a July 2017 breakout and rally that’s now reached a 2-year high at $1.22. A pullback to new support in the 80 to 85-cent price zone should mark a low-risk buying opportunity, ahead of continued upside that could reach $2.00.

6. Antares Pharma, Inc. (ATRS)

Antares Pharma, Inc. (ATRS) caught fire after posting an all-time low at 29-cents in January 2009, lifting in a strong uptrend that continued into the July 2012 all-time high at $5.58. It then plunged in multiple selling waves that finally ended at a 6-year low in March 2016. The subsequent bounce has now completed a round trip into the April 2015 high while retracing half of the multi-year decline. It’s been consolidating above $3.00 for the last three months, building the final stage of a 2-year cup and handle pattern that targets the multi-year high.

7. Corindus Vascular Robotics, Inc. (CVRS)

Corindus Vascular Robotics, Inc. (CVRS) topped out near $4.60 in 2015 and entered a steep decline that continued into January 2017 when it posted a multi-year low at 40-cents. The stock surged higher on strong volume one month later, signaling a new uptrend that reached an 18-month high at $2.25 in early July. It’s been consolidating at new support for the last three weeks, settling on the 50-day EMA while On Balance Volume (OBV) holds near the rally high. This bullish configuration favors continued upside that could eventually reach 2015 resistance at $3.00.

8. Medical Transcription Billing, Corp. (MTBC)

Medical Transcription Billing, Corp. (MTBC) came public at $4.28 in July 2014 and entered a persistent downtrend that continued to post losses into the April 2017’s all-time low at 29-cents. The stock took off in a powerful trend advance just two sessions later in reaction to bullish sales news and topped out at $3.84 in mid-May. The subsequent pullback has now reached major support at the 200-day EMA near $1.20, with a rally from this level, generating buying signals that favor continued upside into the second quarter high.

9. Intrepid Potash, Inc. (IPI)

Intrepid Potash, Inc. (IPI) sold off to 2008 support at $13.80 in 2014 and broke down two years later, entering a vertical decline that reached an all-time low at 65-cents in March 2016. It stair-stepped above $1.50 into June and settled in a sideways pattern, ahead of a December 2016 breakout that stalled at $3.04 a few session later. The stock has spent the last eight months consolidating those gains and is now testing the rally high, with a breakout having the power to generate an uptrend that reaches 200-week EMA resistance between $6.00 and $8.00.

10. Tantech Holdings, Ltd. (TANH)

Tantech Holdings, Ltd. (TANH) came public at $6.00 in March 2015 and entered an uptrend that topped out at $33.97 just five months later. The bottom then dropped out in a violent decline that relinquished more than 90% of the stock’s value in less than three months. Bears maintained control into the April 2017 all-time low at $1.00, ahead of a strong bounce that reached a 10-month high in July. Price action is now testing resistance at the September 2016 breakdown through the October 2015 low, with a buying spike setting the stage for upside into $6.00.

The Bottom Line

August’s penny stock list covers broad territory, with equal weighting between health care, basic materials, and technology. Returning picks reflect both rallies in progress and basing patterns that continue to mature, raising odds for eventual breakouts.

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