Which are the best penny stocks

Screening Filters

1. Price max = $5

   • Purpose: Narrow the universe to penny stocks.
   • Rationale: Penny stocks are typically defined as stocks trading below $5 per share, so this is the core filter that matches the user’s request for “best penny stocks.”

2. Monthly average dollar volume min = $500,000

   • Purpose: Focus on stocks with enough trading activity.
   • Rationale: Many penny stocks are extremely illiquid and hard to trade efficiently. Requiring at least $500,000 in average monthly dollar volume helps identify stocks that are more actively traded and potentially easier to buy and sell.

3. Relative volume min = 1.5

   • Purpose: Highlight stocks with elevated current trading interest.
   • Rationale: Relative volume above 1.5 means the stock is trading at least 50% more actively than usual. This can help surface penny stocks that are getting unusual attention, which may be more relevant when looking for the “best” opportunities among a very broad and risky group.

4. Moving average relationship = PriceAboveMA20 and PriceAboveMA200

   • Purpose: Prefer stocks showing short-term and long-term strength.
   • Rationale: Trading above the 20-day moving average suggests recent momentum, while trading above the 200-day moving average suggests a stronger longer-term trend. Using both filters helps avoid weak or declining penny stocks and instead focuses on names with more constructive price action.

Why These Filters Work Together:

• The price filter ensures the stocks are true penny stocks.
• The liquidity filter removes many thinly traded names that are harder to trade.
• The relative volume filter looks for stocks with current interest or momentum.
• The moving average filters favor penny stocks with positive trend behavior rather than distressed or falling names.

Together, these filters aim to find penny stocks that are not just cheap, but also more liquid, actively traded, and technically stronger than average—making them more suitable candidates when searching for the “best” penny stocks.