Written by Norman Isaac Mwambazi

Four penny stocks to buy in July using Technical Analysis

It is a new month, and now that your entire paycheck has been sent, you may be currently looking at …

It is a new month, and now that your entire paycheck has been sent, you may be currently looking at what low-priced stocks to buy and add to your portfolio that would later give you a return on your investment. Well, look no further because, in this article, we have brought you four penny stocks that have passed out technical analysis that could be a good buy right now.

But before we dive into the details, we need to understand a few keywords here: Penny stocks and technical analysis.

What is Technical analysis?

In one of the first articles on this website, we had a more extended look at technical analysis, so let me summarise it here for you. By definition, technical analysis examines historical market data like the price of the stock and its volume in active trade to determine its real value. Technical analysis involves analysing past and present statistics and behavioural economics of stock markets to help traders determine the intrinsic value of stocks. Depending on their needs, stock traders have two technical analysis approaches: the top-down approach and the bottom-up approach. 

Penny stocks

A penny stock derives its name from “penny, ” which is the smallest unit of the dollar, pound, or other currency. With the same logic, a penny stock is that stock- usually from a small company- that trades for less than $5 per share. Due to their small size, most penny stocks are not listed on large exchanges like the New York Stock Exchange (NYSE) but are instead traded via Over-The-Counter (OTC) transactions. These transactions (stock buying and selling) are conducted through the electronic Over-The-Counter Bulletin Board (OTCBB). Unlike the NYSE trading floor on Wall Street, OTC transactions have no such thing, so quotations are all done electronically.

Now that you know what penny stocks are and what technical analysis is, let us dive into this list of four penny stocks that have shown strong buy indicators after being technically analysed by analysts.

Brickell Biotech, Inc. (ticker: BBI)

Brickell Biotech, Inc. (BBI) is a clinical-stage pharmaceutical company headquartered in San Diego, California, United States. Founded in 1987 by Andrew Sklawer, the company focuses on developing innovative and differentiated prescription therapeutics to treat debilitating skin diseases.

At the moment, Brickell stock is looking like a potentially good buy, with the group’s moving averages pointing to a Strong Buy. According to Yahoo Finance, yesterday, June 30, 2021, the company closed the trading session with an 8% gain in its share price after complete enrolment in Phase 3 studies of its Sofpironium Bromide.

Brickell stock is currently trading at $0.95 a share, and it has a $63.91 million market capitalization.

Yamana Gold Inc. (ticker: AUY)

Towards the end of May, Gold crossed the $1900 mark for the first time in five months and went on to achieve its highest appreciation since July last year. It is common knowledge that once the price of gold goes up, the value of gold mining companies most definitely also goes up, and this where Yamana Gold Inc. comes in.

The company’s technical analysis is excellently set up. Its Relative Strength Index (RSI) is at 25.41, which means one thing: Yamana’s stock is exceedingly oversold, as reported by Nasdaq over two weeks ago.

Headquartered in Toronto, Canada, Yamana Gold Inc. is not limited to gold alone. The company also owns and operates other precious metals like silver and copper mines in its home country Canada and the South American countries of Argentina, Brazil, and Chile.

Yamana Gold has a market capitalisation of $4.05 billion, and its stock is currently trading at $4.22 a share.

Predictive Oncology Inc. (POAI)

Predictive Oncology Inc., a company headquartered in Eagan, Minnesota, United States, provides various healthcare products and services primarily through three segments: Skyline, Helomics, and Soluble.

A few days ago, the company experienced a significant increase in the volume of its stock traded that fuelled an 8.65% gain-a signal that investors rate it highly.

Predictive Oncology Inc. has a market capitalisation of $85.59 million, and its stock is currently trading for $1.31 a share.

B2Gold Corporation (ticker: BTG)

We have another gold company on the list, but unlike the first three companies on this list that posted good figures towards the end of last month, B2Gold ended June with its lowest stock price in a year.

However, industry analysts believe the company will have a better July that will kick off its recovery in the coming months. This gold miner has a Relative Strength Index (RSI) of 28.57, which is an indicator that its stock is strongly oversold and is headed for an uptrend sooner than later.

B2Gold Corporation has a market capitalisation of $5.47 billion, and its stock is currently trading at $4.21 per share. The company is headquartered in Vancouver, Canada, and it owns and operates gold mines in Namibia and Mali in Africa and the Philippines in Asia.

What does it mean when a stock is oversold?

On this list, we have two stocks (Yamana Gold Inc. and B2Gold Corporation) whose stock is quoted as being oversold, and we would like to shed a little light on what that means. When a company’s stock is oversold, it means that even though it is still trading for a lower price, it has the potential to overturn and see its price rise.

However, it is worth noting that a stock or any other asset can stay in this oversold state for a long time. This means that just because a stock is oversold does not mean that it will rally soon or at all.

Most importantly, it is worth noting even strongly that penny stocks are volatile, and you should invest in them well, knowing that they can either pay off highly or equally fetch you nothing but losses after your investment.

PS: Stock prices quoted in this article can change at any time. This article is intended for insight purposes, but the final decision to invest in the mentioned stocks is solely yours.