Four New Technical Setups to Watch in August 2010

Earnings continue to be at the forefront of Wall Street’s attention this week, as July fades into memory. Last month was a strong one for stocks, as major indexes like the S&P 500 rallied more than 7% in July’s full month of trading. But volatility continues to be a major factor for investors – the large price swings that have plagued the market since May are still adding unpredictability to stocks…

But that’s proven to be a good thing for penny stock traders, who have been able to take advantage of higher-percentage price movements for more profitable trades. Here’s a look at four new penny stock plays for August that could trigger profitably in the short-term.

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!

Horizon Bancorp (NASDAQ: HBNC) – This regional bank holding company is forming a bullish ascending triangle pattern right now, priming for a significant move higher if shares can breach resistance at the $23 level. With shares sitting right on support right now, there could be a nice upside to be seen this week. Still, I’d wait for a move above $23 before taking part in the trade – if the pattern gets aborted, a fall for $21 is likely.

Oteegee Innovations (OTC: OTGI) – Oteegee Innovations is a tiny development stage holding company that’s historically been mired by substantial cash burn. But while profits are a long way off for this company, moves toward new solar technologies are getting investors excited. Watch for potential momentum-driven upside this week, but be extremely careful: downside moves could be fierce for this volatile OTC play.

Vicon Industries (AMEX: VII) – This tiny security system company develops video systems for a number of applications. But from a technical standpoint, Vicon’s product lineup is less important than the chart behavior it’s been exhibiting. The investors aborted a bearish descending triangle pattern on Friday, giving this stock a bullish turn. Shares could potentially move toward resistance at $5.24 this month.

Sillenger Exploration Corp. (PINK: SLGX) – Sillenger Exploration is a tiny pre-exploration gold mining company the burns cash at an alarming rate. Still, that hasn’t kept shares from rallying today. The reason: this stock’s getting pumped by a paid promoter. I think that the short-side is a much more attractive position to take on this play. Wait for the first sign of weakness this week before betting shares fall lower…

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, August 6.

[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

August 2, 2010

Four New Technical Setups to Watch in August 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 more at Penny Sleuth :: Jonas Elmerraji