TM Editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence.

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A security pattern traces the distinct movements of security prices that, once recognized, help traders to make informed trading decisions. These patterns are identified by their vital geometrical elements, which are formed by changing security prices. Here is a closer look at some cheap stock opportunities that may be revealed by analyzing these patterns.

Buy Signal for Imperial Petroleum Inc. (IMPP) (Cup-and-Handle)

The cup-and-handle (sometimes called cup-and-holder) pattern is formed when the price of a security initially declines and then rises to form a “U”­ like rounded shape (as shown by points 1, 2, and 3, also known as the cup). Once it forms the right lip, it is characterized by a short, relatively straight price decline (as seen from points 3 to 4) forming the handle.

The declining handle potentially forms due to mounting selling pressure that is created when the security tests its high at the right cup lip. After the sellers give up, the security has the potential to break out to the upside.

Trade idea:

• Buy near the breakout (entry) price – $0.44.
• Sell at the target (exit) price – $0.49.

Trend trading is a strategy based on the technical analysis of changing market prices. The trend trader enters into a long position when a stock is trending upward, and uses the short position when a stock is trending downward.

Buy Signals for Smart Share Global Limited (EM), Cloopen Group Holding Limited (RAAS), & Compass Therapeutics, Inc. (CMPX)

Trade idea:

• Buy at the opening of the stock market on Monday if the opening price has gone up by no more than 0.5% of Friday's closing price.
• Sell after the price has risen by 2% from Friday's closing price, or at the end of the trading week if the target is not reached.

Buy Signal for Harmony Gold Mining Company Limited (HMY)

Trade idea:

• Buy HMY at the current market price if seen as appealing.
• Sell HMY after receiving the "sell" recommendation from trusted analyses.

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