Playing the Penny Stock Patterns

Solid earnings season numbers continue to be a driving force on Wall Street, giving investors some protection against the barrage of poor economic data that's been spilling out of thinktanks and government agencies over the course of the last couple weeks.

But while the market remains tumultuous for most investors, we'll capitalize on under-the-radar movements in the penny stock world to attempt to find gains this month.

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.

Horizon Bancorp (NASDAQ: HBNC) - I wrote to you last week about this potentially bullish banking stock. Shares of Horizon Bancorp have been forming a very appealing ascending triangle pattern for several months now, and a breakout could be imminent the next time this stock tests its $23 support level. Again, don't buy shares until $23 gets confirmed...

Synaptics Inc. (NASDAQ: SYNA) - Synaptics is a small-cap customer computer interface developer that was also featured in a previous watchlist for its potentially bullish ascending triangle formation. Shares need to stay above $33 for this pattern to trigger. Don't go long until they do.

[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.]

This article originally appeared on Penny Sleuth.