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3 Penny Stock predictions in this week's Q&A

by , 06 February 2019
3 Penny Stock predictions in this week's Q&A
Q. “I've recently bought Advanced Health shares. On Friday, the share price suddenly moved from around 90 cents down to 85 cents. Was there a news event announced or what happened? Where do you think the share price will move to next?”

 
A. Unfortunately, there has not been one SENS news announcement since December 2018. The news announcement only mentioned about the upcoming AGMs and the number of shares available.
 
What’s more important to note is that, Advanced Health is a penny stock company which has very low liquidity.
 
This means, because of the low volume of buying and selling, you can see a penny stock spike 12.5% in just one day.
 
This is due to the wide spread between the bid (buy price) and the offer (selling price).
 
Here’s the chart analysis on Advanced Health.
 
 
 
Advanced Health has been on a strong downtrend from R2.54 down to R0.40 since 2016.
 
On 23 November 2018, the price broke above the downtrend at R0.50.
 
This started its next up leg which told us that there was a higher demand of buying compared to selling which caused the price to rise to R1.00 per share.
 
The first likely target for Advanced Health is at R1.22 (at the previous ceiling level. This is a classic example of a penny share where there is a better chance for the share to move up from where it is now than down. 
 
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Q. “Timon, please let me know what your view is presently of Wescoal? The share price has been sporadically declining (with huge spikes in price). I’ve got a fairly large proportion of my small share portfolio in this company now for over 8 months.”
 
A. Since 2017, Wescoal has formed a descending triangle showing lower high prices from R2.63 and at the same time hitting the same low prices of R1.66.
 
 
 
As you are holding a large portion of shares, I’ll give you two possible scenarios, which you can keep your eye on.
 
Scenario 1:
 
If Wescoal’s price breaks below R1.60 (low), it will confirm that there are more sellers than buyers which will bring the price down to the first target of R0.75. Descending triangles are more often than not a bearish pattern, where the price will more likely break below the support of R1.66.
 
However, because the price is still within the descending triangle formation, there is another possible scenario (less likely) that could play out.
 
Scenario 2:
 
If Wescoal decides to bounce off the low price of R1.66, and rise above the R2.00 high level, we can then see the share price rise to R2.60.
 
This target is also at the high of the triangle.
 
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Q. “I keep reading optimistic views on Jubilee and yet the share price is down 4% from where I’ve bought it… Could you please give me your analysis on the share?”
  
A. Jubilee has been bouncing in a rectangle pattern since early 2018.
 
 
 
From a high of R0.54 down to R0.40, this rectangle pattern shows you market activity of indecisiveness.
 
It is anyone’s guess which direction it is more likely to head.
 
However, there are two ways this can play out as the rectangle is a neutral pattern.
 
First, if the price trades and breaks above R0.54 (Ceiling), the next target price for Jubilee will rise to R0.70.
 
On the other hand, if the price breaks below R0.40 (Floor) this could send Jubilee to its doom to a target of R0.25.
 
“Wisdom yields Wealth”
Timon Rossolimos,
Analyst, Pick Pocket Trader


3 Penny Stock predictions in this week's Q&A
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