Volatility is the friend of traders, and we have been blessed with higher than "historically typical" beta over the course of the past few months. Expect increased volatility to stick around for a long time, with significant moves on an hour-by-hour, day-by-day and week-by-week basis … at least until many of the uncertainties surrounding the stock markets and the macroeconomy are dealt with or fade away.
There are a few notable examples of global uncertainties that I am keeping an eye on and have been explaining at length: rising military conflicts in Kashmir, Venezuela and the South China Sea; legal concerns surrounding the U.S. president; slowing economies in Asia and America; falling velocity of money; the trade war; fiscal concerns with European banks; and the Q ratio screaming collapse.
Most of our featured penny stocks from last month have done very well. Within a couple of weeks, Arcimoto, Inc. (FUV) climbed from $3.35 to as high as $7.35 at its peak. Turquoise Hill Resources Ltd. (TRQ) rose from $1.66 to $2.17. SITO Mobile, Ltd. (SITO) moved from $1.50 to $2.46 at its peak. ARC Document Solutions, Inc. (ARC) and Eastman Kodak Company (KODK) were also both trading higher. Even the smallest of the shares represented well – since last month's profile, AMERI Holdings, Inc. (AMRH) and Energy Focus, Inc. (EFOI) have attained levels of 41 cents (up from 24 cents) and $1.45 (up from 89 cents).
The majority of opportunities this month may be new to you, although there are a few familiar faces as well. I feel confident expecting even further gains from our previous selections, while also anticipating that the following newer choices will outperform the broader markets significantly.
Penny Stock Picks to Buy Using Technical Analysis for March 2019
<Disclosure: Many of the stocks mentioned above (and below) were also profiled, traded or otherwise discussed in the Peter Leeds Newsletter. As well, Peter may own shares in some of the investments mentioned, in which case that fact will be clearly indicated. See below for an additional important disclaimer regarding penny stocks.>
Uranium Energy Corp. (UEC)
After displaying a dark cloud cover setup just under a month ago, this pattern played out exactly as you might expect – specifically, the price declined. After recovering almost all of that slide lower, Uranium Energy Corp. (UEC) soon showed a very negative bearish meeting lines setup, after which the stock has done nothing except decline, decline and decline over six of the past seven trading days, thus demonstrating negative candles on the trading chart. The only other day over that span was neutral, meaning that we have not seen a positive candle on the trading chart at all in the past seven days.
The long-term trend is up, the medium-term trend is up, and only the very short-term trend is decidedly down. However, we expect the short-term downtrend to reverse and shares of Uranium Energy to begin moving higher within the coming days.
Keep in mind that this stock was a long-term selection for subscribers to the Peter Leeds Newsletter, as well as a short-term technical analysis swing trade. While I like this company from a very long-term perspective, the purpose of discussing Uranium Energy here and now is because we also believe that the stock has some great upward potential within the next few weeks.
VEON Ltd. (VEON)
VEON Ltd. (VEON) stock may be setting up an ascending triangle pattern. With higher highs and higher lows, this one is in a very short-term upward trend right now. Given a few more days, VEON may be setting up to break out to the upside and go for a nice run to more realistic price levels.
In addition, current prices are being supported by increased buying and trading activity with each decline of the share price. When price dips are bought up by interested investors, that typically will give a lot of weight to any of the technical moves you were seeing on the trading chart.
WidePoint Corporation (WYY)
WidePoint Corporation (WYY) just set up a morning star pattern, which is very bullish for prices going forward. This is a complex three-day setup, and it very rarely happens, but assuming the shares of the stock act as typically would be expected in the wake of such a trading indicator, the next short-term and medium-term move for the stock will be to climb higher into a new range.
Keep in mind that the stock markets are open right now, so what looks like a morning star pattern as of the time of writing this content may or may not be valid by the end of trading today at 4:00 p.m. New York time. Furthermore, in terms of disclosure, we should mention that we have featured WidePoint stock many times in the Peter Leeds Newsletter, with very mixed results from one time to the next.
It is also important to mention that any pattern, especially the morning star, should not be trusted until you get proper confirmation. This means that, on Friday, the shares must trade higher, and more specifically open higher, than where they close today. Otherwise, the morning star trading chart pattern is about as useful as gasoline for an electric-powered vehicle.
Teligent, Inc. (TLGT)
Teligent, Inc. (TLGT) has also set up a very lose morning star pattern that may have represented the V-shaped bottom in the stock. Since the original decline over the past six months (from $4.50 all the way down to $1.20), Teligent stock has recovered partially and is now consolidating within the current price range (mainly between $1.50 and $1.75).
That was not at all enough to get my attention, but one week ago, the trading chart displayed a very bullish meeting lines setup, which implies that the share price will begin another run toward higher levels.
However, my biggest concern with Teligent stock is the outside bearish engulfing pattern that may be setting up based on today's trading activity. Typically, that is a very negative candle, except that it took place on a sideways-trending stock (over the past few weeks) – in such a case, the candlestick pattern probably will not be as applicable.
Thus, it is wise to proceed with caution with Teligent. With this, or in fact with any stock, make sure to protect your downside, perhaps by adhering to some pretty strict stop losses in the case of the shares moving the wrong direction. Remember, cut your losses very early, and let your gains run.
KemPharm, Inc. (KMPH)
KemPharm, Inc. (KMPH) is displaying a recent tweezer bottom, which typically suggests an inflection point from downtrend to uptrend. Tweezer bottoms and tweezer tops are very rare and constitute one of the more reliable candlestick indicators.
It is interesting to note that KemPharm's trading chart established an almost perfect tweezer bottom setup and that the two parts of the tweezers are both the exact same size in terms of the body, and their upper shadows or upper wicks are both identical in terms of length/price. Tweezer bottoms are very rare … and textbook or perfect tweezer bottom setups are even more unique.
The tweezer bottom occurred around the $2.10 range four days ago. Despite a slight and immediate upward move, the shares have cooled off a little bit. I do not believe that the upside has fully played out, and the strength of the tweezer bottom implies that there's a lot of room for the shares to move higher in the short term.
Oncolytics Biotech Inc. (ONCY)
I believe that Oncolytics Biotech Inc. (ONCY) stock is going to be declining in price. Therefore, it makes a good target, assuming I'm correct, for short sellers and people willing to bet against the company.
As of today, the trading chart is showing dark cloud cover on significantly greater-than-typical volume already in the session (and that is considering that we are only halfway through the trading day). However, consider that the shares are stuck in a sideways range-bound trend ($2.30 to $1.95), which implies that any candlestick analysis, or even more conventional technical analysis, is not as reliable as it typically would be if Oncolytics stock was trending higher or lower already.
Even so, Oncolytics has continually fallen back with each price increase, and the stock is having an incredibly difficult time breaking above the $2.30 resistance level. The most recent failed approach to get above the $2.30 price point was literally today, and I do not expect Oncolytics shares to touch that level again or break above that point for a very long time.
Eastman Kodak Company (KODK)
Kodak has rebuilt itself as a complex technology corporation, with popular solutions for various aspects of its industry: commercial print, electronic displays, packaging, commercial films, 3D printing and various other fronts.
While having such a disperse focus may be a negative for any company, the good thing about the spaces in which Kodak operates is that many of them, including 3D printing and electronic displays, are rapidly growing industries. By building the solutions on the front lines of several up-and-coming technologies, Kodak is in a great position to grow rapidly.
Is there any value to Kodak shares at their current levels? I believe so, and the coming months may be very rewarding for Kodak shareholders. The trend is your friend, and in this particular case, that trend is up and just getting started.
ARC Document Solutions, Inc. (ARC)
ARC Document Solutions displayed one of the most bullish candlestick trading chart patterns, specifically a morning star three-day setup. The complex pattern implies that a strong drive higher will soon begin. In fact, that is exactly what we saw playing out from the point of the morning star pattern until now.
I do not believe that the upward move is over, and in fact, the majority of the rise is likely still yet to come. However, trading on Wednesday displayed a massive 30-cent drop in the share price, which may have set this one up at tremendously attractive price levels. The decline even brought shares down to match up with the rising trendline, which often may be a very attractive accumulation level depending on your own personal strategy (in my opinion).
In fact, in trading so far today, we are seeing a doji pattern, which is demonstrating uncertainty among investors at these new lower prices. This would typically lead to a reversal of the short-term trend, which based on yesterday's horrible trading was down. Thus, investors seem to be unwilling to sell ARC at these lower prices, while the buyers are fine scooping up the undervalued shares at these new levels.
The Bottom Line
At very least, whichever direction the markets move, that move will probably happen with greater-than-typical volatility. This means that there may be larger and quicker gains … but there is always the other side of the coin – downside moves might be an inch uglier than many expect.
Just be ready, be fast with decisions, react to events quickly and watch closely. Of course, with investing, you should always keep those guidelines in mind, but they may be even more important going forward throughout this tumultuous and uncertain time.
P.S. Newer investors: Always start by paper trading. Learn to trade profitably first, before ever using actual money. Keep track of imaginary trades in real stocks while you refine your skills and strategy.
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.
<Important disclaimer: 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.>