4 Technical Patterns to Watch for a Penny Stock Breakout
Major stock indexes rocketed last week – the S&P 500, for instance, gained 3.1% in the last five trading days following economic fundamentals that are finally aligned with investor expectations. Expectations are something that we talked about in detail to lead last week’s Watchlist. After all, the difference between what investors and analysts expect and the real-world numbers is typically the number-one driver of stock movements.
That’s been especially true in 2010 as numbers missed expected targets for most of the year. But with indexes finally creeping into positive territory this week, the potential for a fundamentals-fuelled rally is once again real. And that means a whole lot more for small-cap investors…
That’s because investing in the right small-cap stocks can significantly multiply your gain potential. Last week, while the S&P gained its paltry 3.1%, our watchlist picks jumped an average of 10.16% — that’s serious movement for only five trading days. That’s like making 528% annually on your portfolio – or, when compounded, enough to turn $1,000 into $142,043 in a single year.
With that in mind, let’s move on to this week’s watchlist.
In case you’re not familiar, each week, The Penny Sleuth takes a look at a list of penny stocks that are exhibiting abnormal volume, strong technicals, upcoming news, or another catalyst that suggested they might be making a material move in the coming week.
As usual, while our Watchlist errs on the safe side of small-caps, using technical analysis to tell us where a stock is headed, we opened the comments up to readers again this week, giving you the chance to offer up more speculative penny stock plays.
Check out the comments after this article to get a glimpse at a slew of new user-submitter penny stock picks — and the chance to submit your own!
First, though, let’s take a look at this week’s breakout penny stocks worth watching…
LMI Aerospace (NASDAQ: LMIA) – Small-cap aerospace company LMI Aerospace provides design engineering and structural assembly services to the defense and aerospace technology markets. Since October shares have been forming a bullish ascending triangle pattern, which suggests share could move significantly higher on a break above the $14 level. Don’t consider making a move until then…
Bank of Kentucky Financial Corp (NASDAQ: BKYF) – Small regional banking stock Bank of Kentucky Financial Corporation broke out above its 50-day moving average last week, a move that clears the stock to higher ground in the short-term. With a strong resistance level at $22 right now, a break above that price could make for a double-digit gain in March.
Suffolk Bancorp (NASDAQ: SUBK) – Suffolk Bancorp is another small banking play that hit my radar in this morning’s pre-market. The stock broke above a significant resistance level at $30.50 in Friday’s trading, and is confirming that level already this morning. As long as we see a close above $30.50 today, we could be in store for a big upside play later this week.
W&T Offshore (NYSE: WTI) – Our sole short side play this week is W&T Offshore, an independent natural gas exploration company. Shares have formed the dreaded head-and-shoulders pattern in the past few months, signaling to investors that selling time could be coming up. A break below shoulder level is our trade trigger on this play.
Share Your Penny Stock Picks…
Once again, we’re going interactive this week…
Just post your best penny stock pick below in the comments section of this article by Friday, March 12.
Submit your own breakout penny stock pick for March 2010 below…
Cheers,
Jonas Elmerraji
Penny Sleuth
March 8, 2010
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My pick is ants technically its about time for the next leg up and up and up. Very interesting business that could be a game changer in the 20 billion dollar data base market. Oracle Sybase IBM Microsoft could all use the technology that Ants software has that no one else does symbol ANTS
Still waiting for APDN to make it’s move. It’s got the patented technology. Check out the news. .075 to .15 is not out of the question.
IDOI. Their machine which eliminates the need to remove shoes for security can take a 2 mil stock to a penny for hugre gains!
I STILL LIKE JEDM. ITS AROUND .059 PER. BUT COULD MOVE HIGHER WITH UP COMING INSIDE BUSINESS SHOW NATION WIDE IN MARCH. I JUST CAN’T SEE IT STAYING THIS LOW MUCH LONGER. IF YOU BUY NOW AT .059 AND SELL LATER OR JUST KEEP IT LONG TERM SEEMS LIKE A NO BRAINER.
Did you see what SCEY did last week. I bought it on 12/24 for .018 and sold it last week for .34. I’ve heard a rumor that it is going to make another run, this time to .50, I just bought it again at .13. I am also looking at
HPLF, they are developing an artificial liver and will likely be the target of a major medical company.
i like isco
MY picks to watch are BGMO due to break out soon when the deal with Pakistan is announced and EBIG when it gets more deals done and shows it is for real. cheers, V
I like KMKGF otc pink sheets KAM TSX V
has gold properties in the Yukon that are showing promise
NMNZF, SSTP, PSUD, MTCH. All for different reasons, but with one thing in common – GREAT IDEAS (well, NMNZF is mining, but in a unique place with good test results). The balance are little innovative companies that are truly penny stocks; very cheap, at this writing, with fantastic potential (SSTP can be had for less than a penny!). Remember JBII that I mentioned in November?
Constantine Metal Resources (CEM-V $0.225 Cdn) Is a penny stock at just the right stage. VMS deposit in Alaska with good grades and just enough holes to give confidence of an excellent chance of success but not enough to have attracted analysts.
My pick this week is BEDA. The anticipated news plus the actual share buyback will cause prices to soar. Not long after that, official news of the acquisition of TMH wil launch another huge price increase and this is all within the next 2 weeks!
KKD looks good —-Everybody likes donuts. check out their technicals
SPSNQ….great short term money maker.
I’m looking at WLSI this week
i like lvs and also mgm big movers over the summer…go vegas
Good god Almighty! …I’m on a streak for the past several weeks with no end in sight ! …many are what i
have stated in the past as ‘a buy’ …And Yes! i own stock in them all. These are rock solid movers for
maximum gains in the future. …hell, many of them were turned loose running on pure profits quite a while ago and ‘still’ rolling up gains. I just want to share a few to you guys and ladies for your long term studies
for future maximum gains. I will make this short and sweet without my usual comment and thesis as to ‘why’
I bought and how far i think they can go in the future. …These are ALL American companies to the upside!
AXL – American axle & manufacturing corp.
BAC- Bank of America
C – Citigroup
CATM – Cardtronics
DPZ – Dominoes Pizza
FITB – 5th third bancorp
FNSR – Finisar corp
SCSS – Select comfort corp.
I have many more but do not have the time to list them here. I am researching as i type this on screen #3,
a few more lucrative buys for my portfolio for maximum gains in the future. Research is the key! study the
competition, and all things factored in, sometimes buying the competition is the best play!
P.S. …I fought hard yesterday against others to buy (CX) at low bid. …I pushed the trigger and got 1/3rd of the shares i bid on. …Waited, and got a few more intraday, but decided not to chase it. I now have 279 companies in my portfolio and determined to make the 350 level by November 2010.
GPXM is breaking out of the 50MDA NOW.
My speciality is Canadian junior mining stocks which in 2009 boosted my portfolio by 133% with individual stocks returning gains as high as 300% in as little as 3-6 months. We just had the yearly PDAC show in Toronto and even though I took a day off work to attend a second day, I still did not get even HALF the booths covered.
I have however brought home about 50 lbs of promotional material to research companies and will share my BUY list on a weekly basis if i can find the time.
Not sure whether this qualifies as a penny stock by some peoples definition, (price is already over $20. and had a previous high before the 2008 meltdown of over $30.) but it is a small company in Canada not yet followed by the main stream but has an amazing growth story from the founders garage too recently greatly enlarged premises to meet demand!
I stumbled on the company because my profession is as an expedite courier dealing with imports and exports out of the Toronto airport and i became intrigued by their world wide exports. I refer to RUGGED,com
(RCM-V) that has become a key supplier of heavy duty switches and other material for the worldwide buildout of electricity grids becoming a preferred supplier to such stellar companies as Siemens and ABB of Switzerland that was a core holding of mine from just over $7. to around $20.
Do your own due diligence, I bought at $18.30 and expect to hold for years unless something drastic changes my perspective on this little gem.
Here we are the the perhaps top we will see … the administration with Obama destroying our freedoms and our lowly dollar is on the way to fiat status and worth pennys —- right now.. with only about 64 cents worth of buying value.. and the Chinese creating there own trading partners without the USE of the USDollar Bartering with 11 countries – circumventing the dollar.. Is it an evil communnist plan 30 years in the making ???? stockpiling copper and other assets for the rug they are going to pull out from under the west and The USA’s CREDIT Rating going away from AAA rating what do you do ??? noone to buy our DEBT anymore noone wants it.. HERE comes unbeleivable interest rates %%%%%%%% astronomical inflation..
So what do I invest in..Well in earths history the economies that collapsed were all collapsingbecause of the size of debt that they carried — debt destroys economies and leads to war… Always.. so back to the Standard of OLD when Men traded beteen themselves —the metals of OLD Gold & Silver and the energy to sustain a country at war Black GOLD>>> NATURAL GAS plays next time…
USA energy companies and USA MINERS—– low low low low to HIGH HIGH HIGH microcaps will explode… Support AMERICA AND PROVIDE FOR OUR OWN –with jobs and energy Independence
(GSPG) Largest Land and claim accumulator in Mining state of Nevada-(the Motherlode) area of OLD silver city CARSON NEVADA— GOLD too USA MINERS not Bolivia or PERU or China
(ITRO) Silver without a mine –revolutinary GREEN RECYCLER —Nevada – production 10X this year over last year
(MMTE) Black Gold and Peak oil every person will have to drive to work even if OIL goes to $125/ barrell– War Israel and IRAN or terrorists strike the Saudi Arabian OIl fields — get prepared
( BDGR ) need I say more financial catasrophy always leads to wars we went to IRAQ for a reason its our energy DEPENDENCE ON OIL>>> and we are still in the area .. Ships YEMEN…
(MGRN) Black gold from Oklahoma
These are so low you can set yourself up… nanocaps.. LEVERAGE LEVERAGE LEVERAGE help us get ready— invest in the UNITED STATES OF AMERICA and save of from the oil price destruction thats coming with PEAK OIL… PATRIOTS UNITE !!!