We recently started a series called “Penny Stock of the Day”. These ideas are geared towards 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: NET Power Inc. (NYSE: NPWR)
Today’s penny stock pick is the energy technology company, NET Power Inc. (NYSE: NPWR).
NET Power Inc. operates as an energy technology company in the United States. Its technology includes NET Power Cycle, a power generation system that produces electricity from natural gas while capturing atmospheric emissions. It has patented Allam-Fetvedt Cycle for natural gas power with near-100% CO2 capture. Allam-Fetvedt Cycle produces low-cost, dispatchable clean firm power. CO2 can be sold for EOR or stored; oxygen storage adds grid flexibility. This is perfect for surging AI/data-center demand.
Website: https://www.netpower.com/
Latest 10-K report: https://ir.netpower.com/financial-information/sec-filings/content/0001845437-25-000008/npwr-20241231.htm
Analyst Consensus: Not Covered by Wall Street Analysts.
Potential Catalysts / Reasons for the Hype:
- The company is adding post-combustion capture to its suite of carbon capture solutions. This allows them to supply clean power to AI data centers 1 to 2 years ahead of the full NET Power cycle commissioning.
- Management recently reported that value engineering and tax benefits have driven the Levelized Cost of Electricity (LCOE) for Project Permian down from over $150/MWh to under $100/MWh.
- NPWR recently struck a carbon capture partnership with Entropy Inc. to speed up clean gas projects, giving them a much-needed operational offshoot to generate near-term momentum.
- If management announces signed contracts with data centers for their near-term gas turbines or proves that the cash bleed is fully stabilized, there is a possibility of a rapid relief rally.
On analyzing the company’s stock charts, there seem to be multiple bullish indications…
Bullish Indications
#1 Falling Wedge Pattern Breakout: The daily chart shows that the stock has been forming a falling wedge pattern for the past several months. These are marked as purple lines. It has typically taken support at the bottom of the wedge before bouncing back. The stock has currently broken out from the falling wedge pattern. Once the stock breaks out of the falling wedge pattern, it could move higher.
NPWR – Daily Chart
#2 Bullish Stoch: The %K line of the stochastic is above the %D line, indicating possible bullishness.
#3 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.
#4 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. This looks like a good area for the stock to move higher.
NPWR – Weekly Chart
#5 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart as well, and is also moving higher from oversold levels, 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 NPWR is above the price of $2.20.
Target Prices: Our first target is $3.80. If it closes above that level, the second target price is $5.00.
Stop Loss: To limit risk, place a stop loss at $1.30. Note that the stop loss is on a closing basis.
Our target potential upside is 73% to 127%.
For a risk of $1.10, our first target reward is $1.80, and the second target reward is $3.80. 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.
NPWR – Consolidated Statements of Operations
- In late 2025, NPWR reported a $1.1 billion impairment charge related to its California refineries. Class action lawsuits have been filed against the company for alleged violations of federal securities laws.
- Hedge Funds Decreased Holdings by 63.0K Shares Last Quarter.
Hedge Funds | Source: TipRanks.com
- The company’s La Porte demo facility testing phases has now slipped into 2026–2027; Phase 1 FID now targeted H1 2026.
- Corporate Insiders placed Informative Sells of Shares Worth $11.4M in the Last 3 Months.
Insiders | Source: TipRanks.com
- The company’s commercialization strategy relies heavily on its relationship with Baker Hughes, OXY, Constellation, and other strategic investors and partners.
- Despite being a loss-making company, the executives are being paid significant compensation.
NPWR – 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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