Penny Stocks to Watch for June 2017 (CYTR, DELT)

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Penny Stocks To Keep Watching

1. Sequans Communications SA (SQNS)

Sequans Communications SA (SQNS) sold off between $19.50 and 66-cents between 2011 and 2015, finally bottoming out in August and bouncing into a well-organized basing pattern that continued into an April breakout to a multiyear high. The opening print of the April 2011 IPO at $9.00 could generate a magnetic target in this emerging uptrend, which has attracted sizable buying interest in the last two months. Price action has now eased into a rising channel pattern, with support at $4.00 set to offer a low-risk trade entry during the next pullback.

2. Southcross Energy Partners L.P. (SXE)

Southcross Energy Partners L.P. (SXE) came public in November 2012 and posted an all-time high at $26.49 in March 2013. The subsequent decline picked up steam into the first quarter of 2016, dropping the stock to an all-time low at 38-cents. A two-legged recovery wave reached a 17-month high in April 2017, giving way to a symmetrical triangle pattern that’s still under construction. A breakout above $4.74 should ignite a fresh rally leg that might reach $6.50 while a decline through $3.33 will break the bull pattern, exposing the stock to a new downtrend.

3. Castle Brands Inc (ROX)

Castle Brands, Inc. (ROX) plunged in the 2000s bear market, dropping from its IPO of $9.60 in April 2006 to an all-time low at 1-cent. A slow-motion recovery reached $2.03 in November 2014 and gave way to a steep decline that posted a higher low at 65-cents in December 2016. It’s been all upside since that time, with a February breakaway gap generating a momentum rally that’s now entered a critical test at the 2014 high. A breakout will open the door to a more vigorous uptrend that could reach high single digits while a selloff through $1.70 will signal a bearish reversal.

New Penny Stock To Watch For June

4. ImmunoGen, Inc. (IMGN)

ImmunoGen, Inc. (IMGN) posted a 12-year high at $20.25 in 2013 and sold off to $5.34 in December 2014. A 2015 recovery wave stalled less than one point below the prior peak, generating a steep decline that continued into an 18-year low at $1.51 in November 2016. Buyers finally took control in 2017, generating a channeled uptick that reversed at 2014 resistance about two weeks ago. This pullback could signal a buying opportunity, with a bounce at or above the unfilled April gap at $3.25 setting the stage for a breakout toward long-term resistance near $8.00.

5. China Commercial Credit, Inc. (CCCR)

China Commercial Credit, Inc. (CCCR) came public on the U.S. exchanges at $6.50 in August 2013 and went through a series of growing pains that contributed to a steep downtrend. It finally bottomed out at 25-cents in February 2016 and entered an uptrend that stalled at $3.20 in September. A lazy decline off that level posted a higher low in March 2017, ahead of a momentum-fueled advance that’s now testing the 2016 high. A breakout should attract broad buying interest that may support continued upside into a critical test at the IPO opening print.

6. Hovnanian Enterprises, Inc. (HOV)

Homebuilder Hovnanian Enterprises, Inc. (HOV) topped out in the mid-70s in 2005 and got crushed when the real estate bubble burst, dropping to an all-time low at 52-cents. It bounced to $8.05 in 2010 and tested that resistance level in 2013, generating a reversal and downtrend that posted the second higher low of the decade in January 2016. The subsequent uptick peaked in December, ahead of a rounded correction that’s just yielded a base breakout above $2.50. This bullish price action sets the stage for a breakout attempt at 2-year resistance just above $3.00.

7. Pieris Pharmaceuticals, Inc. (PIRS)

Pieris Pharmaceuticals, Inc. (PIRS) began life on the OTC market in 2014, stuck in a trading range between $2.00 and $4.25 into a 2015 breakdown that dropped the stock to $1.26 in January 2016. It ground sideways into November, finally testing the first-quarter low, ahead of a January 2017 breakaway gap that’s attracted steady buying interest. The rally gathered additional momentum in early May after the company announced a key partnership with AstraZeneca PLC (AZN) and is now testing the 2015 high, which also marks the all-time high.

8. Radiant Logistics, Inc. (RLGT)

Radiant Logistics, Inc. (RLGT) rallied above its 2006 high at $1.05 in 2010, entering a strong uptrend that posted a series of highs into the June 2015 all-time high print at $8.00. It sold off to $2.94 in the first quarter of 2016 and bounced to $3.80, where aggressive sellers triggered a decline to a 2-year low at $2.45. Committed buyers then emerged, lifting the stock in a series of rally waves that have now reached within $1.50 points of the prior peak. It’s been basing on the 50-day EMA for the last three weeks and could lift into a test of resistance during the summer months.

9. CymaBay Therapeutics, Inc. (CBAY)

CymaBay Therapeutics, Inc. (CBAY) rallied into a test of the all-time high at $13.78 in February 2015 and entered a steep downtrend that continued into the first quarter of 2016, dropping the junior biotech to an all-time low at 82-cents. It bounced to $3.04 in April, posting a yearly high, ahead of a pullback that continued into November low at $1.15. The stock broke out above the 2016 high in February 2017, entering an uptrend that’s just posted a 2-year high at $4.81. Look for strong buying interest to continue in coming months, lifting price closer to double digits.

10. Zynga, Inc. (ZNGA)

Video game developer Zynga, Inc. (ZNGA) came public at $11 in December 2011 and entered a strong uptrend that posted an all-time high at $15.91 in March 2012. The subsequent downtrend continued into October 2014 low at $2.20 and eased into a narrow basing pattern that washed out the last supply of sellers when it fell to an all-time low at $1.78 in February 2016. The stock finally completed a base breakout about three weeks ago, entering a healthy uptrend that could reach the 2014 high at $5.89 in coming months while a pullback to $3.00 might offer a low-risk buying opportunity.

The Bottom Line

Low May liquidity had a dampening effect on penny stock speculation, but a handful of low-priced winners have emerged, carving bullish recovery patterns that predict higher prices into the second half of 2017.

<Disclosure: the author held no positions in aforementioned stocks at the time of publication.>