One of the best things about technical analysis is that it allows you to skip a big chunk of the due diligence you would ordinarily perform while vetting stocks for your portfolio. You do not need to know a single thing about management's track record, for example, or the company's P/E ratio or debt level. In what often seems like an increasingly complex world, then, technical analysis is refreshingly simple!
In this column, I've listed some of the most interesting penny stocks, in terms of their recent technical analysis set-ups, that my team and I have seen lately. We hope that they serve you well throughout the dog days of summer, and we'll see you back here in August.
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.
Brickell Biotech, Inc. (BBI)
Brickell Biotech, Inc. (BBI) is looking like a potentially good buy at the moment, with the group's moving averages pointing to a Strong Buy right now (and indeed, as of the last day of June, prices had jumped up 8%). If Brickell Biotech stock starts to slip over the month of July, however, you can consider this signal to have failed, and you may want to reconsider the position.
Yamana Gold Inc. (AUY)
Anyone who follows my work knows I'm very bullish on the precious metals, but at the moment I'm also liking gold miner Yamana Gold Inc. (AUY) because of its excellent technical analysis set-up. The relative strength index (RSI) is at 25.41, indicating that the stock is incredibly oversold. In addition, a couple of spinning top candlesticks at the end of June suggest that investors may be changing their tune on the stock after the month's downtrend.
Predictive Oncology Inc. (POAI)
It's not visible in the chart below, but Predictive Oncology Inc. (POAI) saw a significant 8.65% gap up at the end of June on the back of extremely strong trading volume, showing that investors have a lot of conviction in the trade. This means it's likely that the market's bullishness on the stock will continue. (Some very good moving averages here don't hurt either.)
B2Gold Corp. (BTG)
B2Gold Corp. (BTG) capped off the month of June with its lowest price in 52 weeks AND a hammer candlestick. The latter may suggest that this gold miner will see a trend reversal pattern over July. The RSI of 28.57 also indicates that B2Gold stock is strongly oversold and way overdue for an uptrend. Watch for confirmation in the form of higher prices.
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.