Is this penny share worth a punt?

London Capital Group (LSE:LCG)

Since we permitted advertising on our website, we've noticed London Capital feature prominently recently, so it's probable they've some sort of campaign going.

Noticing they are listed on the stock exchange, it was therefore only a matter of time before we scheduled a glance at the share price.

Our suspicion is this one's either a punt or a runt. Normal rules of engagement tell us the share price now trades below our logical bottom levels with the result there's a fair degree of risk involved.

Thankfully, it's also trading in the penny regions with the result there's the possibility of reward for comparatively little outlay.

At time of writing, the share is around 1.625p. It is trading in a region where below 1.375p signals a bounce potential at 1.09p. But if 1p breaks, our ultimate limbo dance level becomes 0.48p.

To suggest any bounce has legs, the price requires exceed 3.15p. To confirm it's actually starting some real recovery, the share requires to close a session above 5.25p.

In plain English, it hasn't got a lot of downward wiggle room but quite a lot of upward room for improvement, so perhaps some research to understand their motivation behind the advertising campaign will be justified.

Currently, any bounce bettering 2p looks capable of 2.65p initially with secondary, if bettered, at 3.9p. The secondary risks being quite significant, bettering the immediate downtrend and launching the price into a zone where 5.375p becomes believable.

And then we get to shake the tea leaves again. Visually, it appears closure above even 4p will better a glass ceiling which has formed since 2016 and suggest some proper growth commencing.

Of course, the words of wisdom are: "Do your own research."

Alistair Strang has led high-profile and "top secret" software projects since the late 1970s and won the original John Logie Baird Award for inventors and innovators. After the financial crash, he wanted to know "how it worked" with a view to mimicking existing trading formulas and predicting what was coming next. His results speak for themselves as he continually refines the methodology.

Alistair Strang is a freelance contributor and not a direct employee of Interactive Investor. All correspondence is with Alistair Strang, who for these purposes is deemed a third-party supplier. Buying, selling and investing in shares is not without risk. Market and company movement will affect your performance and you may get back less than you invest. Neither Alistair Strang, Shareprice, or Interactive Investor will be responsible for any losses that may be incurred as a result of following a trading idea. 

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.