We recently started a series called “Penny Stock of the Day”. These ideas are geared for traders with an extremely high risk appetite.
Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.
Penny Stock of the Day: Vislink Technologies Inc. (NASDAQ: VISL)
Today’s penny stock pick is the wireless company, Vislink Technologies Inc. (NASDAQ: VISL).
Vislink Technologies Inc. engages in designs, develops, and delivers wireless communications solutions in North and South America, Europe, Asia, and internationally.
It offers live production products and solutions, such as high-definition communication links that reliably capture, transmit, and manage live event footage; a range of high-margin wireless camera transmitter and receiver products; HCAM, a 4K Ultra HD-capable on-camera wireless system; MicroLite 3, a compact wireless HD transmitter; IMTDragonFly, an ultra-compact HD solution; Quantum, an ultra-low latency and waveform agnostic central receiver; and ultra-compact onboard solutions.
The company also offers miniature transmitters and handheld receivers, such as HHT3 and Mobile Commander for tactical surveillance; airborne video downlink system, a comprehensive aerial-based video transmission solution that delivers real-time surveillance to enhance law enforcement, emergency, and critical infrastructure operations; and MSAT, a portable tri-band satellite antenna system, as well as DVE5100 encoder and IRD6200 decoder electronics units. It serves live production, military and government, and satellite communications sectors.
Website: www.vislink.com
Latest 10-k report: https://sec.report/Document/0001493152-21-008926
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for VISL in the last 3 months, the stock has an average price target of $2.00, which is nearly 67% upside from current levels.
Source: TipRanks.com
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- Good feedback regarding the video quality provided by VISL during the Super Bowl.
- The company announced that it will be showcasing its latest feature-packed solutions for automated, AI-driven remote production for live news and sports at NAB 2022 in Las Vegas, NV, April 23-27.
- The inclusion of the company’s name in a Department of Defense contract titled “58–Wireless HD video transmitters.”.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Consolidation Area Breakout: The daily chart shows that the stock was trading within a consolidation area for the past several months. This is marked as a pink color rectangle. The stock has currently broken out of this consolidation area, indicating possible bullishness.
VISL – Daily Chart
#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.
#3 Price above MA: The stock is currently above its 50-day SMA, indicating that the bulls have currently gained control.
#4 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
#5 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates bullishness.
#6 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a purple color dotted line. This is a possible bullish indication.
VISL – Weekly Chart
#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
#8 MACD above Signal Line: In the weekly chart as well, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for VISL is above the price of $1.35.
Target Prices: Our first target is $2.50. If it closes above that level, the second target price is $3.80.
Stop Loss: To limit risk, place a stop loss at $0.70. Note that the stop loss is on a closing basis.
Our target potential upside is 85% to 181%.
For a risk of $0.65, our first target reward is $1.15, and the second target reward is $2.45. This is a nearly 1:2 and 1:4 risk-reward trade.
In other words, this trade offers 2x to 4x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses.
VISL – Consolidated Statements of Operations and Comprehensive Loss
- The company was formerly known as xG Technology, Inc. and changed its name to Vislink Technologies, Inc. in February 2019.
- Despite being a loss-making company, the executives are being paid significant compensation.
VISL – Executive Compensation
- The company had received a letter from the NASDAQ Staff on March 4, 2020, notifying that VISL did not comply with Listing Rule 5635(d) because its February 2020 offering did not meet the Nasdaq definition of a public offering under Listing Rule IM-5635-3. On April 30, 2020, NASDAQ determined not to delist VISL’s Common Stock for such non-compliance and closed this matter by issuing a letter of reprimand under Nasdaq Listing Rule 5810(c)(4).
As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!
Happy Trading!
— Trades of the Day Research Team
READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.
Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.
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