Penny Stock Watchlist: Your Last Shot at These Setups for August 2010

Mergers and acquisitions are ruling the market this week as companies throw cash at smaller penny stock firms. As a result, volatility’s on the rise and traders are raking in the profits. Here’s a glimpse at four penny stock plays that could be tradable this week.

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) – I’m continuing to keep my sights set on this regional banking play. That’s because the ascending triangle pattern being formed by this volatile $73 million company could result in a potentially lucrative short-term breakout. Sometimes, though, that kind of gain potential means that you’ve got to play a waiting game, as has been the case with HBNC this month. Don’t consider putting your capital on the line until shares break above $23.

ArcSight Inc. (NASDAQ: ARST) – I told you earlier that merger and acquisition activity was on the uptick; ArcSight could be one of the big beneficiaries of that trend. According to scuttlebutt on Wall Street, numerous bidders could be competing to acquire the company above $40 per share. If a bidding war does break out, it could mean nice upside, even after the run-up shareholders have enjoyed.

Digimarc Corporation (NASDAQ: DMRC) – Shares of software firm Digimarc have been in an uptrending channel for the last several months now. With shares finding support at the 50-day moving average and at the lower trendline, the downside risk is largely diminished for this firm. This stock has a potential a price target around $23.

Savient Pharmaceuticals (NASDAQ: SVNT) – This tiny development stage pharmaceutical firm could be headed higher thanks to a bullish moving average crossover and an approach toward resistance. Don’t pick up shares until the stock breaks higher.

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, September 3.

[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 30, 2010

Penny Stock Watchlist: Your Last Shot at These Setups for 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.

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