3 Penny Stocks With Stellar Gain Potential for July

July 13, 2010By: Jonas ElmerrajiArticles RSS feedPrintPrint

We've got another handful of exciting penny stock plays this week – but before we get to them, I wanted to say thanks to those of you who became a fan of the Penny Sleuth on Facebook...

For those of you who became a fan before this morning, we've already picked 10 winners to receive a special Agora Financial Prize Package – if you're among the winners, you'll get an email later this week asking for your shipping details. Our Facebook page is a good resource for Sleuth readers who want to get ahold of our latest investment ideas – including small-cap commentary in between full-blown issues of the Penny Sleuth.

If you weren't one of the folks who's already visited our Facebook fan page, just visit http://www.facebook.com/PennySleuth to check it out.

Now, without further ado, let's take a look at some penny stocks...

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 (NASDAQ: WERN) – Shares of this trucking company have been forming a big, wide ascending triangle of late, one of our favorite upside patterns in the penny stock trading world. This pattern is still nascent, however, and there's likely some downside risk in the short-term. Wait for a break above $24 before going long.

Minerco Resources (OTC: MINE) – Minerco Resources gave you another chance to make some short-side penny stock gains last week. All told, you've had the chance to make 53% on shares since I first recommended betting against this stock two weeks ago. This pumper continues to be volatile, so I'm recommending that you close out your shorts now. We'll focus on more predictable patterns instead.



Books-A-Million (NASDAQ: BAMM) – One of those predictable patterns is taking place in book retailer Books-A-Million right now. Shares triggered a downside leg off of a bearish descending triangle in June, but started to reverse back up in early July. Now, this stock is starting to show us a bullish ascending triangle pattern – albeit more of a consolidation at this point – that could push shares back up to the $6.50 range.

Playboy Enterprises (NYSE: PLA) – While Playboy may be a controversial company, the investment opportunity it's currently presenting is decidedly less explicit. Founder Hugh Hefner announced a potential deal to take Playboy private this morning, offering current investors $5.50 per share, a major premium over the sub-$4 price the stock traded at on Friday. Shares are currently priced at $5.31, which reflects the risk that the deal won't go through.

Keep an eye on this one – it could offer interesting upside to the $5.50 range as we get closer to settlement, especially with new rumors of a competing bid.

[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.]

Jonas Elmerraji
Managing Editor, Penny Sleuth
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