Penny stocks are notoriously volatile, but a basic understanding of technical analysis can help you profit from these inexpensive trades. All you need is a willingness to learn, a keen eye for detail, and an ability to be quick on the draw. Read on for some of the plays the Peter Leeds Team currently has its eyes on.

Some of the set-ups I describe below may no longer be relevant or intact as of the time you read this article. Please conduct your own due diligence. Many stocks mentioned here were also discussed in the Peter Leeds Newsletter. Peter 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.

PaySign, Inc. (PAYS)

I'm liking the double bottom chart pattern that, as of the time I was writing this column, hadn't yet come to fruition (i.e., turned into an uptrend) for PaySign, Inc. (PAYS). But this, combined with some positive newsflow regarding a new digital banking referral program, could soon change. I'll be looking for PaySign stock to start climbing towards $6 and above. If it doesn't, I'll consider the signal to have failed and will probably jump ship (and so should you).

Chart showing the share price performance of PaySign, Inc. (PAYS)

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Elevate Credit, Inc. (ELVT)

As regular readers have probably recognized by now, the relative strength index, or RSI, is one of my favorite technical indicators. My reasons are simple: it's incredibly easy to understand and, at least in my experience, it's remarkably accurate. Elevate Credit, Inc.'s (ELVT) RSI is at a very low 24.33 right now, which suggests that it's deeply oversold and bodes well for its prices over the next month or two.

Chart showing the share price performance of Elevate Credit, Inc. (ELVT)

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SPAR Group, Inc. (SGRP)

SPAR Group, Inc. (SGRP) capped off the month of March with a big gap upward, popping from approximately $1.40 to $1.60 overnight. Typically, this is a good sign that a given stock's prices will continue climbing as investors grow more bullish about its prospects. Trading volume is also very high here, underpinning my confidence that investors could make a nice gain with this stock.

Chart showing the share price performance of SPAR Group, Inc. (SGRP)

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Ambow Education Holding Ltd. (AMBO)

An inverted hammer candlestick appeared in the chart of Ambow Education Holding Ltd. (AMBO) at the end of March. Given that this popped up after an approximately 10% loss over the last week of the month, it could suggest that a bullish reversal pattern is in the works. Watch for confirmation in the form of higher prices ahead.

Chart showing the share price performance of Ambow Education Holding Ltd. (AMBO)

TradingView.com

GlycoMimetics, Inc. (GLYC)

After a 20% drop in its prices over the past month, it's possible that GlycoMimetics, Inc. (GLYC) may see better days ahead – that is, if the double doji candlesticks (one of which is slightly imperfect) at the end of its March charts are to be trusted. Now, a doji doesn't in and of itself signify either bullishness or bearishness. Rather, it's to be interpreted as indecision on investors' part. Appearing as these ones do after a downturn, however, may imply that a positive reversal could be in play.

Chart showing the share price performance of GlycoMimetics, Inc. (GLYC)

TradingView.com

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 PeterLeedsPennyStocks.