Penny stocks limped into December, under performing other investments, with the majority of speculative capital pouring into red-hot blockchain and cryptocurrency plays. Small baskets of low-priced biotech and industrial metals lifted to monthly highs but the majority just ran in place or ticked lower, grinding through multi month consolidation patterns or entering new downtrends.
Sierra Oncology, Inc. (SRRA)
posted the most substantial gains on the December watch list, rising more than 30% to an 18-month high. That stock and four previous picks have been added to January’s penny stocks list because their technicals continue to forecast even higher prices. Also, the first penny stocks to watch list for 2018 includes three perennial laggards who have recently shifted out of traditional operations into blockchain technology. Keep in mind these are highly volatile issues that require well-honed risk management skills to avoid steep and painful losses.
January will signal the most favorable seasonality of the year for small caps and low-priced stocks. The prior year’s laggards and beaten down issues often post their strongest yearly gains in the first quarter, for two reasons. First, tax loss selling ends on December 31, allowing weak performers to float higher. Second, winners get sold with equal fervor in January as market players take profits to incur capital gains exposure, often rotating into more speculative plays.
Penny Stocks to Keep Watching
1. Medical Transcription Billing, Corp. (MTBC)
Medical Transcription Billing, Corp. (MTBC)
entered a steep decline after coming public at $5.00 in July 2014, posting lower lows into the second quarter of 2017 when it finally bottomed out at 29-cents. It surged to $3.84 less than three weeks later and pulled back, consolidating gains into a failed October breakout attempt. The stock has spent the last three months grinding sideways in the upper third of the 9-month trading range while the 200-day EMA continues to tick higher, predicting that resistance will break and lift the uptrend into an all-time high.
2. EVINE Live, Inc. (EVLV)
EVINE Live, Inc. (EVLV)
rallied to a 4-year high at $8.73 in 2011 after dropping to an all-time low at 18-cents during the economic collapse. That level marked resistance at the top of a rectangle pattern that broke support at $1.40 in January 2016. The stock fell into a higher low at 41-cents in September 2016 and turned higher, reversing at the breakdown level into 2017, It bounced at 90-cents in August and is testing resistance once again, with a breakout predicting excellent upside that could test double digits.
3. Sierra Oncology, Inc. (SRRA
Sierra Oncology, Inc. (SRRA)
posted an all-time high at $33.75 during its IPO session in July 2015 and turned sharply lower, dropping to an all-time low at $1.10 in June 2017. Committed buyers took control in July, generating an uptrend that’s nearly quadrupled the stock’s price in just six months. The rally is now filling the June 2016 gap between $6.70 and $2.96, raising odds for healthy upside into the fill price in coming months. On Balance Volume (OBV) has already reached an all-time high, predicting that price will continue to play catch-up.
4. Ladenburg Thalmann Financial Services, Inc. (LTS)
Ladenburg Thalmann Financial Services, Inc. (LTS)
rallied to a 15-year high at $4.50 in October 2014 and entered a decline that posted lower lows into November 2016 when it bottomed out at $1.63. The stock bounced into range resistance at $2.80 one month later and pulled back, grinding out a higher low above $2.00 in May 2017. It broke out in October and has been crisscrossing resistance near the November 2015 high at $3.28 for the last 6-weeks. A buying spike above $3.50 should clear this obstacle, opening the door to a test of the 2014 high.
5. Limelight Networks, Inc. (LLNW)
Limelight Networks, Inc. (LLNW)
posted an all-time low at 90-cents in February 2016 and entered a new uptrend that remounted broken range support at $2.00 after the presidential election. The rally reached the 2015 high at $4.43 in October 2017, yielding a breakout that now favors additional upside into the 2010 high at $8.97. The uptick stalled above $6.00 in November, generating a decline that’s just filled the October breakaway gap at $4.50. This price action may signal a low-risk buying opportunity, ahead of a bounce that resumes the strong uptrend.
6. Nova Lifestyle, Inc. (NVFY)
Nova Lifestyle, Inc. (NVFY)
recently formed I Design Blockchain Technology, Inc., a wholly-owned subsidiary. The furniture maker came public at $2.05 in January 2013 and posted an all-time high at $10.35 one year later. The subsequent decline accelerated into July 2016, dumping the stock to an all-time low at 38-cents while a bounce into October ended at $5.15. It carved a higher low in the summer of 2017 and spiked to yearlong range resistance at $2.75 after the magical transformation, with a breakout favoring continued upside into last year’s high.
7. Long Blockchain, Corp. (LTEA)
Long Blockchain, Corp. (LTEA)
formerly known as Long Island Iced Tea, Corp., rallied to $15.00 in February 2015 and sold off, finding support near $3.60 in 2016. It broke down in September 2017, dropping into December’s multi-year low at $1.70 just a few days before its name change triggered a furious pre-market rally into the mid-teens, testing the prior high. The stock opened the regular session in single digits and has been pulling back since that time. A Fibonacci grid stretched across the vertical uptick predicts a buying opportunity at the .786 retracement level near $3.40. As of Dec. 29, the stock is hovering just below the $5.00 penny stock threshold, it may not be a penny stock for long.
8. Nxt-ID, Inc. (NXTD)
Nxt-ID, Inc. (NXTD)
joined the blockchain bandwagon on December 20 when it announced the development of a cryptocurrency payment platform. It came public at $30 in 2013 and posted an all-time high at $72.50 one month later. A decline accelerated into December 2015, dropping the stock to $1.60 ahead of even lower lows into November 2017. A vertical rally spike and deep pullback followed the blockchain news while a Fibonacci grid stretched across the uptick predicts a buying opportunity at the .786 retracement level near $2.75.
9. Viking Therapeutics, Inc. (VKTX)
Viking Therapeutics, Inc. (VKTX)
came public at $8.50 in April 2015 and topped out at $10.00 just one month later. The subsequent downtrend found support just under a buck in November 2016, yielding an August 2017 test that completed a bullish double bottom reversal. Buying power exploded in September, lifting the stock into December’s 2-year high at $4.40. It’s been consolidating gains in a narrow trading band for the last three weeks and could head higher in January, lifting toward broken 2015 range support near $5.70.
10. Aptevo Therapeutics, Inc. (APVO)
Aptevo Therapeutics, Inc. (APVO)
spiked up to $50 shortly after entering the public exchanges at $8.00 in July 2016 and settled into a downtrend that found support at $1.75 in the first half of 2017. It broke down in August, dropping to an all-time low at $1.15 and remounted broken support in September, setting off fresh buying signals. The subsequent uptrend reached a 16-month high at $4.50 in early December and eased into a high tight pennant that could generate fresh upside to $7.50.
MORE WILL UPDATE SOON!!
