Are you searching for penny stocks to invest in and wondering how to get started? You could check out the list of popular stocks with news at the beginning of the day. But that may not necessarily provide you with the best penny stocks to buy. Alternatively, you could look for technical signals, such as stocks with high volume or unusual trading volatility. However, what many retail traders currently utilize is alternative data.
Alternative data involves specific factors that don’t directly impact prices, but they may provide insight into market sentiment. This includes insider trading activity, Google search volumes, and even irregular Twitter tweet frequency. In this article, we will explore the options market and examine stocks that are experiencing an above-average surge in activity.
There is no guarantee that alternative data will translate into a meaningful stock movement. But it can be helpful when building a watch list. The concept is that if there is a higher-than-normal Call or Put buying, it could indicate a bullish or bearish sentiment. Whether this holds for the list of penny stocks, we present today is ultimately up to you to determine. This also continues our list from the article 4 Penny Stocks To Buy For Under $5 With Unusual Options Action.
Penny Stocks TL;DR 15-Second Summary
- Traders seeking to purchase penny stocks can utilize conventional stock lists or technical indicators, although many traders rely on alternative data.
- Alternative data comprises of non-price-influencing factors, such as insider trading, Google search volumes, and irregular Wikipedia page views, that can provide insights into market sentiment.
- This article focuses on the options market and penny stocks that have experienced a surge in purchasing activity.
- Although alternative data is not a guaranteed predictor of significant stock movements, it can be beneficial in creating a watch list.
- While higher-than-normal call or put buying can be viewed as bullish or bearish signals, traders should conduct their own research before investing in these penny stocks. Presented below are a few more penny stocks exhibiting unusual options activity today.
Penny Stocks To Watch
Amyris Inc. (AMRS)
We discussed Amyris a few weeks ago on a list of penny stocks with big news. Givaudan, a fragrance & beauty company, announced that it reached an agreement to acquire certain cosmetic ingredients from Amyris, Inc. The list includes Neossance® Squalane, Neossance® Hemisqualane, and CleanScreen. The terms of the deal include a combination of upfront cash consideration, a performance-based earnout, and a long-term manufacturing agreement.
In addition to that, one of the primary technical levels that have become important is the 50-day moving average. Shares haven’t traded above this level for a sustained period since the end of Q3 last year. While AMRS stock tested this technical level several times, it remains a sticking point, and now traders are looking at the next potential catalyst, which is earnings. This week Amyris reports fourth quarter and full year 2022 financial results after Wednesday’s closing bell.
That may be one of the things prompting speculation in the options market. In particular, this week’s March 17th expiration $1.50 strike Calls have seen the most volume, with more than 6,700 contracts traded. This was much higher than the 2,961 open interest to start the day. What’s important to understand is that though this is Call volume, there has been a significant level of activity on the Bid side of things, according to data from ThinkOrSwim.
Desktop Metal Inc. (DM)
Another one of the penny stocks with unusual activity in the options market is Desktop Metal. The company provides various solutions, including prototyping and mass production, and has gained acclaim from top industry groups. For example, The World Economic Forum selected it as one of the world’s 40 most promising Technology Pioneers. It was also named to MIT Technology Review’s list of 50 Smartest Companies and won Fast Company’s 2021 Innovation by Design Award in materials.
Earlier this month, Desktop launched its Live Suite platform for customers. It’s designed to deliver AI solutions for additive manufacturing. As I’m sure many have already noticed, the trend in AI-anything has captivated the interests of traders thanks to the mass appeal of platforms like ChatGPT. Needless to say, that news has helped promote some bullishness in the penny stock. Shares have bounced from under $1.50 to as high as $2.55 since the beginning of March.
Responding to the milestone, Ric Fulop, Founder, and CEO of Desktop Metal, explained, “Live Suite is the culmination of six years of development by our talented global software team to make AM technology easy to use and ensure it delivers the highest quality results with the most intelligent approaches. As a result, the high level of success that users of our binder jet and DLP technology experience today is simply unmatched.”
What’s going on in the options market? This week saw an uptick in action in DM stock’s January 2024 $3 strike Call options. According to ThinkOrSwim data, most of the options volume was done “between” the market.
Archer Aviation Inc. (ACHR)
Archer Aviation’s stock price has been trading in a relatively consistent channel between $2.50 and $3.06. Much of the breakout move came just as 2022 ended, and Archer made headlines alongside Stellantic.
The two agreed to expand a collaboration to manufacture Archer’s EV take-off and landing aircraft, Midnight. The goal is for Stellantis to mass produce Archer’s eVTOL aircraft as its exclusive contract manufacturer. Stellantis said it intends to increase its strategic holding in Archer via future purchases of Archer stock in the open market.
While growth stocks haven’t been in the greatest of favor with investors, ACHR stock has remained a focus for analysts. Recent coverage from Benchmark has ACHR stock sitting with a Buy rating. The firm also set a $12 price target. With flight testing of the Midnight platform expected in the middle of 2023, speculation may have already started to buzz.
What does the options market look like? Coincidentally, most of the action is right in the middle of the year, in the July expiration of $5 Calls. More than 3,000 contracts traded compared to just 529 Open Interest. Like Desktop, the majority of today’s volume was “Between the Market.”
List Of Penny Stocks
- Amyris Inc. (NASDAQ: AMRS)
- Desktop Metal Inc. (NYSE: DM)
- Archer Aviation Inc. (NYSE: ACHR)
- Farfetch Ltd. (NYSE: FTCH)
- BigBear AI Holdings (NYSE: BBAI)
- EOS Energy Enterprises (NASDAQ: EOSE)
- Invitae Corp. (NYSE: NVTA)
