Best Penny Stocks for August 2024, Using Technical Analysis

Penny stocks are stocks of mini companies that waste and acquisition for little than $5 per share. For that reason, a mini activity successful nan value of a penny banal tin nutrient a ample percent gain. The debased value tin beryllium charismatic to smaller investors, particularly fixed nan easy entree to galore trading platforms. But while penny stocks connection nan imaginable for large gains, they thin to beryllium much volatile than established stocks and are, therefore, a overmuch riskier investment.

Some investors usage penny stocks arsenic portion of a portfolio diversification strategy, taking a mini information of a larger portfolio and focusing connected high-risk, high-reward opportunities. A mini allocation to penny stocks tin minimize their effect connected a portfolio, but fixed nan greater risks, location is besides nan imaginable for ample losses.

Below is an study of nan top penny stocks for August 2024, screened for a precocious return complete nan past 30 days and bullish method patterns. All charts and information are existent arsenic of July 26, 2024.

Absci Corporation (ABSI)

• Price: $4.48
• 30-day return: 13.4%
• Average regular trading volume: 2.18 million
• Exchange: Nasdaq
  

Absci Corporation (ABSI) is simply a biotechnology institution utilizing artificial intelligence (AI) and synthetic biology to create protein-based drugs. A successful trial of support astatine nan 50-week moving mean for nan banal completed precocious astatine $2.80. That debased established a higher swing low and nan first pullback pursuing a bull breakout supra nan 50-week line. It shows improving request and a chance for nan banal to break retired supra $6.72. The $2.80 plaything debased must beryllium retained arsenic support for a bullish script to proceed to unfold.

Hyliion Holdings Corp. (HYLN)

• Price: $2.38
• 30-day return: 46.9%
• Average regular trading volume: 393.32 million
• Exchange: New York Stock Exchange (NYSE)

The banal of Hyliion Holdings Corp. (HYLN)—which manufactures hybrid and electrical powertrains for trucks—triggered a bullish reversal disconnected a inclination bottommost recently, arsenic it rallied supra nan March swing high of $1.96. A bullish trendline break initially indicated improving request successful precocious June. That was nan first emergence supra a anterior plaything precocious since a blow-off top of $58.66 was deed successful September 2020. Support is apt astir nan 50-week line, presently astatine $1.25.

NN, Inc. (NNBR)

• Price: $4.08
• 30-day return: 34.2%
• Average regular trading volume: 385,600
• Exchange: Nasdaq

NN, Inc. (NN) designs and manufactures metallic and integrative components successful 26 accommodation crossed 4 continents. Signs of a bullish inclination reversal successful nan banal are heating up, arsenic it has rallied backmost supra its 200-week moving mean for nan 2nd clip recently. If nan banal tin stay supra nan 200-week statement astatine $3.83, it has a bully chance of continuing to strengthen, initially pinch a bullish breakout supra nan astir caller plaything precocious of $5.40.

Nuvation Bio Inc. (NUVB)

• Price: $3.74
• 30-day return: 25.1%
• Average regular trading volume: 1.91 million
• Exchange: NYSE

Nuvation Bio Inc. (NUVB) is simply a biopharmaceutical institution processing therapeutics to target cancers that are among nan astir difficult to treat. The banal looks for illustration it whitethorn beryllium preparing to motorboat higher pursuing caller signs of a bullish inclination reversal. The banal triggered a bullish breakout supra its 50-week moving mean successful nan 2nd half of January 2024. That was followed by a crisp beforehand to a plaything precocious of $4.16 adjacent nan extremity of March. Its trading range during that week was 151%. Subsequently, a bull pennant shape formed, and a breakout triggered successful precocious July supra $3.20.

The Honest Company (HNST)

• Price: $3.88
• 30-day return: 33.3%
• Average regular trading volume: 1.64 million
• Exchange: NYSE

Stock of The Honest Company (HNST)—which sells non-toxic, earthy babe products—triggered a bullish reversal supra a anterior plaything successful precocious November 2023. It continues to show signs of strengthening. A mates of days earlier, a successful breakout supra nan 50-week moving mean occurred. The 50-week statement should proceed to clasp arsenic support during weakness, while a breakout supra nan caller plaything precocious of $4.89 confirms a rising trend.

What to Know About Penny Stocks

Many penny stocks waste and acquisition via over-the-counter (OTC) markets, which intends they person minimal regulatory oversight and small expert coverage, making it difficult to entree meticulous institution information.

However, nan penny stocks we've identified successful this article are each listed connected nan New York Stock Exchange aliases Nasdaq, which intends they are taxable to nan aforesaid listing requirements arsenic immoderate different institution connected these exchanges. These requirements are intended to guarantee that only high-quality securities are disposable for trading connected nan exchange.

While penny stocks are a riskier finance than established stocks owed to their volatility, nan imaginable for precocious returns is charismatic to immoderate investors.

How We Chose nan Best Penny Stocks

There were a fewer criteria utilized to find nan stocks listed successful this article. Of course, nan value of nan banal needed to beryllium beneath $5 per share. The stocks needed to person a minimum mean regular trading measurement of 100,000 shares—used to thief guarantee liquidity. The banal besides had to person astatine slightest 24 months of trading history.

Then, nan charts were reviewed for bullish patterns, including breakouts supra trendlines, cardinal resistance, and moving averages. Candlestick patterns were besides considered, arsenic we looked for signs that pointed to a bullish inclination reversal aliases indications that a inclination was strengthening. Still, nary 1 tin foretell what will hap successful nan future, and past capacity is not a guarantee of early performance.

Penny Stock Advantages and Disadvantages

The debased value of penny stocks offers investors precocious imaginable for growth, and they tin springiness smaller businesses a level to entree funding. But while these stocks tin bring investors important gains, they besides transportation nan consequence of important losses.

There are greater risks associated pinch investing successful penny stocks than pinch much established stocks. One disadvantage is that astir institutions, including communal costs and galore ETFs, are prohibited from purchasing stocks beneath $5 per share. Penny stocks usually don't person overmuch liquidity. It tin besides beryllium difficult to find coagulated nationalist accusation astir penny banal companies that waste and acquisition complete nan counter. Given nan further risks, penny stocks are not suitable for each investors, particularly those pinch a debased risk tolerance.

There are ways to mitigate nan added risks, starting pinch raising nan minimum value and mean trading measurement and selecting penny stocks that waste and acquisition connected nan NYSE aliases Nasdaq. Overall portfolio consequence tin beryllium contained by allocating only a mini magnitude of full superior to nan penny banal market.

The Bottom Line

There are immoderate benefits but besides important risks associated pinch investing successful penny stocks. Investors tin mitigate those risks by allocating only a mini information of their full portfolio to penny stocks and utilizing technical analysis to measure banal performance. Here, we screened for penny stocks that had a precocious return complete nan past 30 days and displayed bullish method patterns.

The comments, opinions, and analyses expressed connected Investopedia are for informational purposes only. Read our warranty and liability disclaimer for much info.

As of nan day this article was written, nan writer does not ain immoderate of nan securities listed above.