Some traders mistakenly think that technical analysis and penny stocks are an ill-fated combination…but that’s not always true. Using technical analysis on penny stocks is not a foolproof method because of the low liquidity often associated with penny stocks, so here are a few bullish ideas from the Trending123 Pattern Scan powered by Recognia to get your research started. Both have volume over 200,000. These patterns are expected to play out in the intermediate term (six weeks to nine months).
Bullish Symmetrical Continuation Triangle
The price has broken upward out of a consolidation period, suggesting a continuation of the prior uptrend. A symmetrical continuation triangle pattern like this one typically shows two converging trendlines as prices reach lower highs and higher lows. Volume diminishes as the price swings back and forth between an increasingly narrow range reflecting uncertainty in the market direction. Then well before the triangle reaches its apex, the price breaks out above the upper trendline with a noticeable increase in volume, confirming the pattern as a continuation of the prior uptrend.
Target Price: $0.53 – $0.57
Bullish Continuation Wedge
After a temporary interruption, the prior uptrend is set to continue. A Continuation wedge represents a temporary interruption to an uptrend, taking the shape of two converging trendlines both slanted downward against the trend. During this time the bears attempt to win over the bulls, but in the end the bulls triumph as the break above the upper trendline signals a continuation of the prior uptrend.
Target Price: $0.01 – $0.01
InvestorPlace advisor John Lansing tracks the charts all day and offers expert technical analysis in his day trading, options and trading services: Power Trading at the Open, Parabolic Options and Trending123. Trending123 members receive access to the Trending123 Pattern Scan powered by Recognia free as part of their membership.