High volume can indicate market strength, but volume is relative. Thirty million in traded shares doesn’t mean much if the average daily volume is higher. However, a volume spike to thirty million is a different story.
Volume spikes are a sign of piqued market interest, but their impact can be fleeting. Take GameStop, for example. It has seen spikes in trading volume, but they don’t last, nor the high share price they created. A sustained increase in volume is a sign of market strength that can sustain a rally.
Penny stocks Complete Solaria (NASDAQ: CSLR), Senti Biosciences (NASDAQ: SNTI), and POET Technologies (NASDAQ: POET) show volume spikes that have their stocks up double-digits. The question is if these are knee-jerk reactions and market mechanics at work or sustainable changes in sentiment and opportunities for penny stock investors.
Complete Solaria Volume Spikes Quadruple Digits: Hold
Complete Solaria is a small solar panel technology company and distributor operating in the US. The company stock has been trending upward from a recent bottom on word it would restructure its debt. The news confirming the deal sent the market up another 50% on a 7000% volume spike, suggesting a turning point has been reached.
Analysts are optimistic about this company. Only two analysts have ratings but are buyers and see a triple-digit upside from the current levels. Among the catalysts are an expectation for 50% year-over-year growth in fiscal 2025 and the potential for profitability in 2026.
The problem is that the company still has debt and may need help to regain traction. That and the massive spike in the share price have early investors running for the doors. The price action is up significantly but forming a bearish candle, confirming resistance at a critical technical level that will likely cap gains for the foreseeable future. Short interest is not a factor in the rally because interest was low at the last report, but it may have risen since.
Senti Biosciences Awarded $8 Million for SENTI0-202 Study: Buy
Senti Biosciences is a pre-clinical biopharma focused on cell and gene therapies. Its leading candidate is SENTI-202 for malignant tumors and acute myeloid leukemia. The news causing its volume to surge is about an award of $8 to help advance its technology, which is good news because Senti has virtually no revenue. The treatment is in early Phase 1 trials and may move on to its next step in 2025.
Senti Biosciences stock surged 100% on a 100x increase in volume and may continue higher. The market shows signs of bottoming at current levels, and the chart shows a strong entry signal. Analyst support is tepid but bullish, providing some incentive for the market. The single analyst rating under one-year-old is a Strong buy with a $6 price target or a 1000% upside from today’s price points.
POET Technologies is Turning a Corner: Buy
POET Technologies is not a new company. The business has been around for decades, advancing optical technology to coincide with the AI revolution. Its optoelectronic components are the first of their kind and combine optics and electronics onto a single semiconductor wafer. They are finding new demand in the data center and AI industry, where they are lowering costs while improving scalability. Among the news driving the stock today is a collaboration with Foxconn to build high-speed AI systems.
Shares of POET surged 140% in early April and are now up 35% to set a new intraday high. The price action shows active and growing support, which puts it on track to reclaim $3.50 soon. One analyst firm issued a rating within the last year; they rated the stock at Buy and saw it advancing more than 100% to $7.50. Assuming the company meets its expectations, its stock could easily reach that level. Two analysts forecast a 30% increase in 2025 revenue and may be underestimating the market. POET isn’t on the level of Advanced Micro Devices (NASDAQ: AMD), Micron (NASDAQ: MU), or NVIDIA (NASDAQ: NVDA), but their DC business is booming, and POET is playing in the same market.
