Penny stocks priced under Rs 10 with a positive breakout on the charts

resr 5paisa Research Team

Last Updated: 7th September 2023 - 05:05 pm

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Penny stocks are scrips of companies with a low price and as the name suggests was originally meant to categorise stocks priced under $1. Over time, the term has been associated with companies with low price, low market capitalisation and low liquidity, largely meant for speculative trade.

However, some of these stocks are highly traded and it is not unusual to see them among the volume toppers in a day.

Indeed, over time what is a penny stock has changed in the developed markets itself and now many investors treat stocks under $5 as a penny stock.

In India, too, one can make their own filter to pick penny stocks.

Meanwhile, investors looking at the charts often base their strategy on momentum plays. In this, one can have various parameters but one common strategy is to look at stocks which have recently crossed some milestone in the form of simple moving averages or SMAs.

There are essentially three signals that traders look for, stock prices when they cross their 30-day SMA, 50-day SMA and 200-day SMA. These note positive breakouts with a short term, medium term and long-term trend.

If we take a cut off of Rs 10 as a ceiling for a share price and pick stocks based on a positive breakout with a crossover from 200-day SMA, we get a list of 36 stocks that fit the criteria.

Starting from the low end of the price stack there are names like Bisil Plast, Sharanam Infraprojects, Indo Credit Capital, Radaan Mediaworks, Diksha Greens, Manor Estates, Hindustan Bio, Archana Software, Datasoft Application, Brijlaxmi Leasing, Creative Eye and N B Footwear.

Going further up in the stock price charts with price in Rs 5-10 bracket there are names like Mauria Udyog, BSEL Infrastructure, Richirich Inventures, Gyan Developers, Luharuka Media, Symbiox Investment, Agarwal Fortune, P M Telelinks, India Infraspace, Super Crop Safe, Indo-City Infotech, Konndor Industries, Regency Fincorp, Polo Hotels, Milestone Furniture, Lords Ishwar Hotels and Minolta Finance.

This list also includes names like Libord Finance, Mukat Pipes, VXL Instruments, Harmony Capital, Norben Tea & Exports, Constronics Infra and Vardhman Concrete.

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