We recently started a series called “Penny Stock of the Day”. These ideas are geared toward 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: KULR Technology Group, Inc. (NYSE: KULR)
Today’s penny stock pick is the thermal management technology company, KULR Technology Group, Inc. (NYSE: KULR).
KULR Technology Group, Inc. develops and commercializes thermal management technologies for electronics, batteries, and other components applications in the United States. It provides lithium-ion battery thermal runaway shields; automated battery cell screening and test systems; cellchecks; safecases; fiber thermal interface materials; phase change material heat sinks; internal short circuit devices; and CRUX cathodes.
The company’s technologies are used in electric vehicles, energy storage, battery recycling transportation, cloud computing, and 5G communication devices. It sells its products for applications, such as lithium-ion battery energy storage, electric vehicles, 5G communication, cloud computer infrastructure, consumer, and industrial devices.
Website: https://www.kulrtechnology.com/
Latest 10-k report: https://d18rn0p25nwr6d.cloudfront.net/CIK-0001662684/bc2d0096-9bcb-4d69-a165-be96669ec724.pdf
Analyst Consensus: As per TipRanks Analytics, based on 1 Wall Street analyst offering 12-month price targets for KULR in the last 3 months, the stock has an average price target of $5.00, which is nearly 46% upside from current levels.
Analysts | Source: TipRanks.com
Potential Catalysts / Reasons for the Hype:
- KULR reported a record third-quarter revenue of approximately $3.19 million, a 5% increase from the previous year.
- The company recently announced plans to deploy the KULR ONE Space battery on a SpaceX mission in 2026, marking a significant step in its space battery systems development.
- Rumors of a to-be-announced partnership with aerospace manufacturer and launch service provider, Rocket Lab.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Uptrend Channel Breakout: The daily chart shows that the stock has broken out of an uptrend channel, which is shown as purple color lines. This is a possible bullish indication.
KULR – 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 MAs: The stock is currently above its 50-day as well as 200-day SMA, indicating that the bulls have currently gained control.
#4 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates bullishness.
#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink dotted line. The stock is also trading above its 50-day and 200-day SMA. All these are possible bullish indications.
KULR – Weekly Chart
#6 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.
Recommended Trade (based on the charts)
Buy Levels: If you want to get in on this trade, the ideal buy level for KULR is above the price of $3.50.
Target Prices: Our first target is $5.00. If it closes above that level, the second target price is $6.30.
Stop Loss: To limit risk, place a stop loss at $2.60. Note that the stop loss is on a closing basis.
Our target potential upside is 43% to 80%.
For a risk of $0.90, our first target reward is $1.50, and the second target reward is $2.80. This is a nearly 1:2 and 1:3 risk-reward trade.
In other words, this trade offers 2x to 3x more potential upside than downside.
Potential Risks / Red Flags:
- The company has a history of net losses.
KULR – Consolidated Statements of Operations
- The NYSE American had cited KULR for non-compliance with specific equity standards outlined in the NYSE American Company Guide in a letter dated Dec. 20 2023 and was added to the NYSE American’s list of noncompliant issuers.
- The company has a limited operating history and has not yet demonstrated sales of products at a level capable of covering its fixed expenses.
- The company’s Board of Directors recently revealed a strategic decision to incorporate Bitcoin as a primary asset in the company’s treasury program, making the company’s assets dependent on the fluctuating price of bitcoin.
- KULR has customer concentration risk and relies on a relatively small number of customers for a significant portion of its revenues. During 2023, two customers accounted for 61% of total revenue.
- Despite being a loss-making company, the executives are being paid significant compensation.
KULR – Executive Compensation
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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