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Examining Penny Stocks with Technical Analysis for November 2022

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. Please note that penny stocks are notoriously volatile.

New Stocks to Watch

Borr Drilling Limited (BORR)

Borr Drilling Limited (BORR) is a small-cap company in the energy sector, providing drilling services to the oil and gas industry. Below is a daily chart of BORR showing that the stock bounced off its lows in mid-July 2022.

From a low of $2.45 touched on July 14, 2022, when the stock gapped down, price has subsequently recovered. Borr Drilling stock has broken up above its 50-day moving average and is currently forming higher highs. Its moving average convergence divergence (MACD) line has turned positive as it has moved above its zero center line, and the MACD line is above the signal line.

Daily chart of Borr Drilling Limited (BORR) showing price making a series of higher lows.


GrafTech International Ltd. (EAF)

GrafTech International Ltd. (EAF) is a small-cap stock in the industrial sector. It engages in the production of graphite electrode products, which are essential in the production of electric arc furnace steel and other ferrous and nonferrous metals.

Since November 2021, EAF had been in a deep downtrend, plunging from around $13 to lows of around $4 in September 2022. It looks like the stock is attempting to break its downtrend, as it has recently risen to hug its 50-day moving average, moving along this level for six trading days. The moving average, which is a lagging indicator, has turned upward, and this is a bullish signal. If price is eventually able to break through the 50-day moving average with strong accompanying volume, this might bode well for the future performance of the stock.

A daily price chart of GrafTech International Ltd. (EAF) showing price and the 50-day moving average.


Safe Bulkers, Inc. (SB)

Safe Bulkers, Inc. (SB) is a small-cap stock in the industrials sector. The stock tipped over and entered a downtrend in June 2022. It found support at its 200-day moving average and proceeded to trade sideways, making a series of higher lows in the process.

The positive divergence of price and the MACD is further positive evidence of a possible change in the prior trend. But with price still trading below its 50-day moving average, which is also still below the 200-day moving average, it looks like this stock has some work to do to prove that it has left its downtrend in the rearview mirror.

A daily chart of Safe Bulkers, Inc. (SB) showing the positive divergence of price and the MACD indicator.


Atara Biotherapeutics, Inc. (ATRA)

Atara Biotherapeutics, Inc. (ATRA) is a small-cap biotech stock in the healthcare sector. After touching a high of $28.20 in December 2020, price plunged to reach a low of under $3 in August 2022.

However, green shoots of promise seem to be appearing, and it is possible that this stock has put in its lows. Atara stock recently made a higher low and is currently in a sideways trend. It has crossed above its 50-day moving average, which is also a bullish signal.

A daily chart of Atara Biotherapeutics, Inc. (ATRA) showing sideways price action.


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