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Technical analysis (TA) involves the careful study of a stock’s chart patterns and trends. While 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, that is, there is enough trading volume to back up the patterns you’re looking for.
Below, you’ll find a list of some penny stocks with interesting technical set-ups. Remember to move quickly and exit your position if the stock isn’t behaving the way you expect it to, as this may mean that the trend or signal has changed or failed.
Some of the set-ups described 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.
Catalyst Biosciences, Inc. (CBIO)
Catalyst Biosciences, Inc.’s (CBIO) relative strength index (RSI) is sitting at an ultra-low level of 12.30, which suggests that the stock is oversold and could be due for a positive trend reversal. A bullish gravestone doji candlestick as of the first day of December also signals investor indecision after a period of lower prices for Catalyst Biosciences stock, indicating that the tide may be turning for this beleaguered biotech.
TradingView.com
FedNat Holding Company (FNHC)
As of the end of November, FedNat Holding Company (FNHC) had a hammer candlestick on its chart, which literally looks like a hammer—or a long wick with a small square at the top—which can be a harbinger of much higher prices. This, plus the ensuing 6.5% gap upward as of the first day of December, is a positive sign for FNHC shareholders.
TradingView.com
Almaden Minerals Ltd. (AAU)
As of the last few days of November, Almaden Minerals Ltd. (AAU) had two hammer candlesticks following a 16% downturn over the quarter. This is a great sign that Almaden Minerals stock could see higher prices soon—which is already a good bet, given that the winter months are traditionally seasonally strong for the precious metals.
TradingView.com
Fortuna Silver Mines Inc. (FSM)
Fortuna Silver Mines Inc. (FSM) has had a difficult time of it since Reddit investors propelled the junior silver miners to relatively sky-high prices in February 2021. However, the stock currently seems overly discounted, with a relative strength index of 28.27 and the potential beginning of an inverted hammer signaling that Fortuna Silver Mines shares should be—and perhaps will soon be—trading at much higher prices.
TradingView.com
YPF Sociedad Anómina (YPF)
YPF Sociedad Anómina (YPF) was witnessing an inverted hammer candlestick as of the beginning of December and gapped up 10.75% as of the first day of the month. High trading volume also signals strong investor conviction in the stock. These factors combined may suggest that YPF stock will be returning to the $4.50 to $5.00 levels again in the short to medium term.
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.
