Four New Penny Stock Trades for May 2010

April closed out on a somewhat sour note as stocks tumbled courtesy of investor anxiety over the never-ending Eurozone debt debacle. All told, broad market indexes slid more than 2% last week – a significant downward move considering the rally investors have been enjoying for the past few months.

Earnings will continue to be key this week as scores of companies prepare to announce their numbers to Wall Street. But while most investors focus on the numbers that blue chip companies release, we’ll take a minute to set-up this week with our penny stock watchlist…

In case you’re not familiar, each week, the Penny Sleuth takes a look at a list of penny stocks that are exhibiting abnormal volume, strong technicals, upcoming news, or another catalyst that suggested they might be making a material move in the coming week.

As usual, while our Watchlist errs on the safe side of small-caps, using technical analysis to tell us where a stock is headed, we’ve opened the comments up to readers again this week, giving you the chance to offer up more speculative penny stock plays.

Check out the comments after this article to get a glimpse at a slew of new user-submitter penny stock picks – and the chance to submit your own!

First, though, let’s take a look at this week’s breakout penny stocks worth watching… Remember, if you want to get first crack at these penny stock plays, make sure you’re following me on Twitter!

ARM Holdings (NASDAQ: ARMH) – Don’t be surprised if this chipmaker looks familiar – it made an appearance on last week’s watchlist as well. I’ve been getting a few emails from readers wondering what to do with this trade. For now, just hold tight. Shares are consolidating under resistance, letting momentum shift from overbought to more reasonable levels. The company could stage its next assault on trend line resistance soon.

ABM Industries (NYSE: ABM) – Facilities services company ABM Industries broke out of an ascending triangle pattern in April, and is just now coming back to test support. Wait for a bounce off of support to jump on board with this trade. If shares fail to stop at that level, ABM could make for a good downside trade in the short term.

Administaff (NYSE: ASF) – Taking a look at a stock like Administaff, which is already up 19.7% as of this writing today, most investors would immediately think that it’s too late to make a trade off of this company. But in reality, companies making huge run-ups offer some of the biggest gain potential after the fact. Wait for shares to catch intraday support before considering taking a position… Or better yet, wait for a bounce off of the blue line, then go long shares later this week.

Kaman Corporation (NASDAQ: KAMN) – Small-cap industrial fabricator Kaman Corporation just broke above trend channel resistance. Without a “price ceiling” on shares, the company could be primed to make a more significant breakout this week. Wait for a second consecutive open above that level before taking the trade – and be careful, for this stock, profits will be heavily reliant on a bullish trend in broad market indexes.

Share Your Penny Stock Picks

Once again, we’re going interactive this week…

Just post your best penny stock pick in the comments section of this week’s Watchlist by Friday, May 7.

Cheers,
Jonas Elmerraji
Managing Editor, Penny Sleuth

May 3, 2010

Four New Penny Stock Trades for May 2010 was originally featured in the Penny Sleuth. Check out Wall Street’s 5 Most Profitable Penny Stock Patterns Report.

This story was originally featured on Penny Sleuth.

Read the original story at Penny Sleuth :: Jonas Elmerraji