Penny stocks Diversified Healthcare Trust DHC, RISE Education Cayman Ltd REDU, and TD Holdings, Inc. GLG have all dropped to levels that have been support in the past.
At a support level, there's more demand than supply for the shares. That’s why stocks stop falling when they reach them.
Sometimes stocks rebound off of support levels. This happens when some of the buyers who formed the support get impatient and decide to pay higher prices. This causes other buyers to do the same.
This could result in a snowball effect and cause the shares to rally. There’s a chance it happens with the following three stocks.
See Also: Best Penny Stocks Under $1
DHC is close to the $4.00 level. When it dropped to this level in January and February, a rebound followed. It's also oversold and when shares became oversold in September and October, a rebound followed then as well.
REDU is trading just above the $3.30 level. After finding support there in July and August, a large rebound followed.
GLG is trading close to the $1.25 level. This level provided support twice in early 2020. Significant rebounds followed each time.
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