Monday Penny Stock Watchlist: Earnings Season Kickoff Trades

Today, earnings season kicks off in earnest, giving investors a glimpse at how their companies performed financially for the second quarter of 2010. Earnings season is a big deal for fundamental investors and technical traders alike – after all, the increased volatility of earnings season provides some nice gain opportunities to trade off of, as well as a refreshed investor sentiment.

Since we look at both technical and fundamental investing here at the Penny Sleuth, it’s no surprise why we make such a big deal of earnings season…

As earnings numbers start coming out, we’ll be able to better assess which trade direction we want to focus on – and we’ll be able to hone in on specific trading opportunities. But right now, let’s take a look at some attractive small-cap trading patterns.

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!

Werner Enterprises, Inc. (NASDAQ: WERN) – We talked about Werner Enterprises last week. This transportation and logistics company has been forming a bullish ascending triangle pattern for the past few months, and it’s continuing to build up this week. I think this stock has big time gain potential if you wait out for the right entry point. Don’t buy shares until they break above $24.

Cardiome Pharma Corp. (NASDAQ: CRME) – Shares of this life sciences company are forming a decidedly bullish pattern: an ascending triangle. As with Werner, there’s still a little while before this pattern stands to break out. Don’t buy it until it breaks above resistance.

Teekay LNG Partners (NYSE: TGP) – Teekay is a water transportation firm that focuses on moving liquefied natural gas, petroleum gas, and crude oil. While I’m not particularly bullish on water transportation as an industry, this stock has nice gain potential thanks to a new 52-week high breakout we’re seeing.

TICC Capital Corp. (NASDAQ: TICC) – TICC Capital is a closed-end investment company that provides capital to privately held technology companies. It’s an interesting – and potentially risky – business model, but more important is the technical outlook. Shares hit trendline support recently, and they look primed for a bounce higher. This could be an interesting upside trade… but make sure you put a stop right below support.

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, July 23.

[Independence Note: Unlike scores of other penny stock resources, we’re 100% independent from the companies we talk about in the Sleuth – that means that we never accept compensation in exchange for profiling a company, and our editors never own a position in any stocks they talk about.]

Cheers,
Jonas Elmerraji
Managing Editor, Penny Sleuth

July 19, 2010

Monday Penny Stock Watchlist: Earnings Season Kickoff Trades 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.

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