Momentum Is Hard To Ignore, Especially For These 3 Penny Stocks
Investing in penny stocks can be an exhilarating experience for investors due to the possibility of making enormous gains from relatively small investments. Since penny stocks generally trade below $5, it is possible for an investor to buy penny stocks in bulk. Even if a stock moves up a penny or two, it can translate into big percentage gains.
However, it takes a lot of effort and research on the part of the investors to find the stock that could make such a move. And if you’re just getting started on the road of making money with penny stocks, you’ll want to fully understand how to research. We released an update on how to buy penny stocks and make money.
In that article, we went over some of the key rules to have in mind before “stepping foot” on a trading platform. However, if you are ready to move forward, you know how much it can mean when momentum is a factor. On that note, here is a look at three penny stocks that should be tracked by investors at this point.
Penny Stocks To Watch #1: Workhorse Group (WKHS)
The first on this penny stock watch list is Workhorse Group Inc (WKHS Stock Report). The electric van company had been in the news earlier this year for having agreed to acquire the Lordstown plant belonging to automobile giant General Motors.
We actually highlighted this further following a tweet from President Trump that helped propel this penny stock higher. Check out the article, “A Trump Tweet Sent This Penny Stock On A 239% Run.”
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In a new development, it has emerged that the entity Lordstown Motors Corp has acquired the said plant from General Motors. Although Workhorse does not own any part of Lordstown Motors Corp, it is apparently closely affiliated with the latter. Therefore, this particular development helped WKHS stock rally.
After the news broke, shares jumped as much as 54% in the last few days. Investors may want to keep this on the radar if the momentum continues into next week.
Penny Stocks To Watch #2: Sundial Growers (SNDL)
Another penny stock that experienced a major rally this week was Sundial Growers Inc (SNDL Stock Report). The cannabis company made a major announcement that resulted in a significant rally in the pot stock. Sundial reported that the stock has now been included in the Cannabis ETF on the New York Stock Exchange.
Such a move is a significant development since it will now give a large pool of investors direct access to the stock. It was no surprise that the penny stock soared. It has continued to hold this trend into the close of the week. This was partly due to the follow-up announcement that Sundial will present Q3 results later this month; specifically November 13.
[Read More] 3 Penny Stocks To Watch As Cannabis Attempts A Reversal
After hitting 52-week lows this week, SNDL stock began to turn things around. Of course, these two updates didn’t hurt. But can the current 3-day, 46% move continue into next week?
Penny Stocks To Watch #3: Perma-Fix Environmental (PESI)
Finally, Perma-Fix Environmental Services, Inc. (PESI Stock Report) stock was another significant gainer this week. The move came after the company reported a strong figure from its Q3 2019 results. The company managed to win plenty of new contracts from the United States Department of Energy and also recorded an 88% rise in revenues for the quarter.
The revenues for the period stood at $22.5 million and naturally, the stock soared in the markets as well. Though shares are no longer in penny stock territory at the end of the week, PESI stock traded below $5 as recently as November 6. This supports the original idea that penny stocks can breakout quick and aggressively.
From November 6 to November 8th highs, this former penny stock recorded a move of nearly 50% in that time. As the company closes its last session of the week near the high of the day, can this continue into the new week ahead?
Should I Buy Penny Stocks That Are Running Higher?
This is a good question to ask because let’s face it, everyone gets fear of missing out. One of the things we always discuss is having a plan and sticking to it. Emotions can get the best of new and experienced traders alike. This is where mistakes can happen so try to limit emotional trading as much as possible. That’s just my personal opinion on it. If stocks are in a strong uptrend, it’s good to keep them on a watch list. But you also need to factor in other things.
Ask more questions like why is the penny stock moving so strong? Are there significant developments that have been announced? Has the company raised money recently? This last one is important because if a penny stock breaks out big but then reports raising capital at a discount, it can destroy part of or the entire move the stock had. Unfortunately, when it comes to penny stocks, it is the nature of the beast most times.
If you’re newer to penny stocks, you can quickly and easily access some basic information on our site. Check out anything from what are penny stocks to how to read penny stock chart patterns. Plus there is plenty of other information on different strategies to get more information on.
