We recently started a series called “Penny Stock of the Day”. These ideas are geared towards traders with an extremely high risk appetite.

Our Penny Stock of the Day is chosen by screening for stocks under $5 and then applying technical analysis on the shortlisted set of penny stocks showing unusual volume. When making these trades, please make sure to pay vigilant attention to pricing moves and have a strict stop loss in place to avoid significant losses.

Penny Stock of the Day: Solid Power, Inc. (NASDAQ: SLDP)

Today’s penny stock pick is the solid-state battery technologies company, Solid Power, Inc. (NASDAQ: SLDP).

Solid Power, Inc. develops solid-state battery technologies for the electric vehicles (EV) and other markets in the United States. The company sells its sulfide-based solid electrolyte; and licenses its solid-state cell designs and manufacturing processes.

Solid Power’s core technology is its electrolyte material, which Solid Power believes can enable extended driving range, longer battery life, improved safety, and lower cost compared to traditional lithium-ion. Solid Power’s business model – selling its electrolyte to cell manufacturers and licensing its cell designs and manufacturing processes – distinguishes the company from many of its competitors, who plan to be commercial battery manufacturers.

Website:  https://www.solidpowerbattery.com/

Latest 10-K report:  https://d18rn0p25nwr6d.cloudfront.net/CIK-0001844862/ca30e972-b1a8-4519-81f6-9adfa1519d91.pdf

Analyst Consensus: As per TipRanks Analytics, based on 2 Wall Street analyst offering 12-month price targets for SLDP in the last 3 months, the stock has an average price target of $4.25.

Analysts | Source: TipRanks.com

Potential Catalysts / Reasons for the Hype:

  • The company’s large-format, all-solid-state battery (ASSB) cells are powering BMW’s i7 test vehicles in Munich, a significant milestone. This validates SLDP’s technology and could lead to further collaboration or commercial contracts. There is general optimism about SLDP’s solid-state battery potential, driven by the BMW milestone and sector hype.
  • SLDP has strong financials. The company maintains robust liquidity with $299.6M in cash and marketable securities as of Q1 2025, providing a runway for R&D and pilot line development without immediate funding needs.
  • The company’s partnerships with SK On and others are progressing, with milestones met in 2024 and extensions secured, signaling long-term potential.
  • Hedge Funds Increased Holdings by 31.7K Shares Last Quarter.

    Hedge Funds | Source: TipRanks.com

  • SLDP’s installation of a continuous manufacturing pilot line for sulfide electrolyte is underway, with commissioning on track for 2026. Progress updates in Q3 or Q4 2025 could act as catalysts. The company is also receiving increased demand for electrolyte samples, which could lead to new partnerships or contracts within the next 2–3 months, potentially sparking price movement. SLDP’s sulfide-based electrolyte could also be licensed for non-EV applications (e.g., aerospace, energy storage), creating a potential growth area.

On analyzing the company’s stock charts, there seem to be multiple bullish indications…

Bullish Indications

#1 Uptrend Channel: The daily chart shows that the stock looks poised for a breakout from an uptrend channel, which is shown as purple color lines. This is a possible bullish indication.

SLDP – Daily Chart

#2 Bullish ADX and DI: The ADX indicator shows bullishness as the +DI line is above the -DI line, and the ADX line is currently moving higher from below the +DI and -DI lines.

#3 Price above MAs: The stock is currently above its 50-day and 200-day SMA, indicating that the bulls have currently gained control.

#4 MACD above Signal Line: In the daily chart, the MACD (light blue color) is currently above the MACD signal line (orange color). This indicates a possible bullish setup.

#5 Above Support Area: The weekly chart shows that the stock is currently trading above a support area, which is marked as a pink dotted line. This looks like a good area for the stock to move higher. The stock is also trading above its 50-week and 200-week SMA, indicating that the bulls are gaining control.

SLDP – Weekly Chart

#6 Bullish Aroon: The value of Aroon Up (orange line) is above 70 while Aroon Down (blue line) is below 30. This indicates bullishness.

#7 Bullish Stoch: The %K line is above the %D line of the stochastic in the weekly chart, indicating possible bullishness.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, the ideal buy level for SLDP is above the price of $4.85.

Target Prices: Our first target is $6.50. If it closes above that level, the second target price is $8.00.

Stop Loss: To limit risk, place a stop loss at $3.80. Note that the stop loss is on a closing basis.

Our target potential upside is 34% to 63%.

For a risk of $1.05, our first target reward is $1.65, and the second target reward is $3.05. This is a nearly 1:2 and 1:3 risk-reward trade.

In other words, this trade offers 2x to 3x more potential upside than downside.

Potential Risks / Red Flags:

  1. The company has a history of net losses.

    SLDP – Consolidated Statements of Operations

  2. The company’s high operating expenses ($30.0M in Q1 2025) and continued cash burn for R&D and pilot line development could strain finances, despite a strong liquidity position.
  3. Corporate Insiders placed Informative Sells of Shares Worth $182.4K in the Last 3 Months.

    Insiders | Source: TipRanks.com

  4. SLDP remains pre-commercial, with large-scale electrolyte production not expected until 2026. Any uncertainty or delays could cause a decline in prices.
  5. SLDP has an ongoing legal proceeding. On December 3, 2024, two purported stockholders filed a putative class action against the former officers and directors of Decarbonization Plus Acquisition Corporation III (“DCRC”), including Erik Anderson; Riverstone Holdings, LLC; and related sponsors and entities (the “Hamilton Defendants”) in the Court of Chancery of the State of Delaware (Hamilton et al. v. Anderson et al., C.A. No. 2024 1241-JTL). The lawsuit alleges breach of fiduciary duties and unjust enrichment arising from the merger of Solid Power Operating, Inc. with a subsidiary of DCRC and seeks to recover unspecified damages and equitable relief.
  6. Despite being a loss-making company, the executives are being paid significant compensation.

    SLDP – Executive Compensation

As you can see, today’s featured penny stock offers big upside potential… but it also comes with a number of risks and red flags. As always, when dealing with penny stocks, we advise caution before entering into such high-risk ventures. Remember to think before you trade… understand the risks… and if you decide to trade, stick to your stop-losses!

Happy Trading!

Trades of the Day Research Team

READ BEFORE TRADING PENNY STOCKS: The allure of penny stocks lies in their potential to deliver massive gains in a short period of time. However, in exchange for that opportunity, most penny stocks carry tremendous risk. They can be extremely volatile and are susceptible to “pump and dump” schemes and fraud.

Unlike regular stocks, the financial condition of most penny stock companies can be extremely difficult to analyze, as the majority of such stocks are traded on over-the-counter (OTC) exchanges, which are typically less transparent and less regulated than the major exchanges. In fact, in the penny stock space, it’s often easier to spot warning signs and red flags than it is to identify a sound investment. Nevertheless, we do our best to identify short-term trade opportunities in this exciting space because we know some of our readers are looking for high-risk, high-reward ideas. We just urge you to make sure you fully understand the risks before making any of these trades.

Out of 23,281 Stocks... Only ONE is This Profitable and Undervalued. [sponsor]
$3 billion+ in operating income. Market cap under $8 billion. 15% revenue growth. 20% dividend growth. No other American stock but ONE can meet these criteria... here's why Donald Trump publicly backed it on Truth Social. See His Breakdown of the Seven Stocks You Should Own Here.

Source: Trades of the Day