Top 5 penny stocks?

Screening Filters

1. Market Capitalization: 50M–2B USD

   • Purpose: Focus on smaller companies typically considered “penny stock” territory, while excluding the most illiquid microcaps and avoiding very large firms.
   • Rationale:
     • Stocks under a few billion in market cap are generally in the small-cap / micro-cap range, where penny stocks most often sit.
     • Setting a minimum of 50M avoids the thinnest, most speculative names with extremely low liquidity and higher manipulation risk.
     • This range balances the user’s desire for “penny stocks” with some basic quality and tradability.

2. Price: 0.10–5.00 USD

   • Purpose: Directly capture “penny stocks” by share price.
   • Rationale:
     • In common market usage, penny stocks are usually defined as stocks trading under $5.
     • A floor of $0.10 filters out ultra-low priced “sub-penny” names, which are often distressed or extremely speculative and may not be suitable for most investors.
     • This price band tightly aligns with the user’s request.

3. Monthly Average Dollar Volume: ≥ 500,000 USD

   • Purpose: Ensure minimum liquidity so that “top” stocks are actually tradable and not dead or manipulated tickers.
   • Rationale:
     • Dollar volume (price × shares traded) is a good proxy for how easily you can enter and exit a position.
     • A $500k+ monthly average weeds out inactive penny stocks that barely trade, making the results more practical to trade and more representative of “top” names in the space.

4. Moving Average Relationship: PriceAboveMA20

   • Purpose: Emphasize penny stocks with some positive short-term price momentum or strength.
   • Rationale:
     • Price being above the 20-day moving average suggests the stock is in a short-term uptrend or at least not in immediate technical weakness.
     • This is one sensible way to interpret “top” — not just cheap, but currently acting relatively strong compared to its recent history.

5. 1-Month Price Change %: 0% to 150%

   • Purpose: Filter for stocks that have performed positively or at least held steady over the past month, while controlling for extreme spikes.
   • Rationale:
     • A minimum of 0% excludes names that are sliding lower, focusing on stable or rising penny stocks.
     • Capping gains at 150% removes hyper-extended, one-off spikes that are often driven by news hype or manipulation and might not be sustainable.
     • This helps define “top” as relatively strong but not purely speculative moonshots.

6. Region: United States

   • Purpose: Restrict results to U.S.-based listings to match “in the US stock market.”
   • Rationale:
     • Ensures all companies operate or are primarily listed within the U.S. market environment, matching the geographic scope the user specified.

7. Exchange: XNYS, XNAS, XASE (NYSE, NASDAQ, NYSE American)

   • Purpose: Limit to major U.S. exchanges rather than OTC/pink sheets.
   • Rationale:
     • Many penny stocks trade OTC with very low reporting standards and extreme risk.
     • Focusing on NYSE, NASDAQ, and NYSE American provides a baseline of listing requirements, disclosure, and oversight, raising the overall quality of the penny stock universe being considered.

Why Results Match

• The price and market cap filters define a universe that fits common definitions of U.S. penny stocks.
• The region and exchange filters ensure the stocks are truly part of the U.S. stock market and listed on major, more regulated exchanges.
• The liquidity (dollar volume), momentum (PriceAboveMA20), and recent performance (1-month price change) filters interpret “top” as better-quality, more tradable penny stocks showing relative strength, rather than illiquid or collapsing names.

Together, these filters aim to surface a focused list of higher-quality, actively traded U.S. penny stocks from which the “top 5” can be reasonably selected.