This week is technically over but researching penny stocks has already begun for many traders. While there haven’t been as many headlines on Friday, there are several to take into account and keep in mind over the long weekend. Specifically, I’m talking about oil & gas as well as gold penny stocks.
Oil & Gas Penny Stocks: Buy or Avoid?
Let’s discuss the first topic: Oil and gas. Late this week the big focus has been on the discussions being had among G20 and OPEC+ oil producing countries. Virtual talks were held Thursday night and Friday in a mad dash to finalize oil output cuts. In the wake of the coronavirus pandemic, the supply of oil is far outpacing global demand. Right now the goal is to cut output by 10 million barrels of oil per day.
But a current stand-off has cast a bit of doubt on efforts by all producers to agree to help the greater good. If a deal can’t materialize then it could mean more oil supply being pumped into an already saturated market. Likely good for consumer gas prices but bad for the overall market.
Last week we saw a surge in interest for oil and gas penny stocks as well as energy penny stocks as a whole. Companies like Valaris plc (VAL) and Antero Resources Corporation (AR) raced to new highs on above-average trading volume. In light of these recent developments, some may be questioning the longer-term potential of this latest breakout. I’m sure we’re likely to hear more progress or lack thereof over the weekend and/or into early next week as the story develops.
Gold Penny Stocks Set For New Highs?
While energy penny stocks may be up in the air right now, gold penny stocks are shining. Obviously one of the top penny stocks to watch since the start of April has been THIS ONE. But aside from that, the sector as a whole has been climbing toward new record levels. On Friday, we saw the price of gold hit $1,754.50. The last time gold traded this high was November of 2012. That was the tail end of the biggest gold rally in history that saw prices rise to more than $1,900 an ounce.
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It has become a well-known fact that during times of a bull market for gold, the junior miners or smaller-cap gold penny stocks tend to outperform major producers in the stock market. Simply put, a lower share price, though more volatile, rips higher percentage points on smaller moves than other stocks.
Don’t get me wrong, seeing Barrick Gold stock (GOLD) or Newmont gold stock (NEM) reach new 52-week highs is great. But if that’s only a 15% move compared to a small-cap’s 50% move, I’m sure most would choose the latter all day. So assuming gold prices are en route for new highs, this may be one of the top sectors to focus on at the start of the week.
Biotech Penny Stocks To Watch
We also can’t ignore the big elephant in the room which is the coronavirus and biotech penny stocks. While New York has become the U.S. epicenter for the virus, other cities are starting to catch up. The latest news comes out of Detroit. Everything from testing kits to hand sanitizer is apparently on the table attracting investors right now. While a possible vaccine is still months away according to government health officials, the promising trial data has remained a central point of focus.
Last week we saw companies like Opko Health (OPK), Heat Biologics (HTBX) and BioCryst Pharmaceuticals, Inc. (BCRX) all close the week strong on more virus speculation. After the market closed on Thursday, BioCryst, for example, announced that the company opened enrollment into a clinical trial to assess the safety, clinical impact and antiviral effects of its galidesivir treatment in patients with COVID-19.
“Galidesivir has been safe and well-tolerated in Phase 1 studies, and, as a potent broad-spectrum antiviral medicine, we are hopeful that we will see a benefit in patients with COVID-19,” said Dr. William Sheridan, chief medical officer of BioCryst.
What Are The Best Penny Stocks?
This is just a very brief overview of some of the top trends we’ve seen in the market. Certainly, a top focus will likely be coronavirus-related headlines. But it’s also important to think outside of the box right now. Because of the pandemic, we’ve got a unique economic situation.
This is seeing governments and central banks pump money into the economy and hedge against the potential fall-out to come. Meanwhile, many non-essential businesses are shut down. At the same time, of the “essential” businesses that are still open, what are some of the outside beneficiaries of this latest activity?
For example, if people are sitting in their homes and some restaurants are still open for take-out, one of the industries that has actually benefited in the market has been delivery stocks. Another beneficiary a few weeks back was medical device companies.
Furthermore, we also saw companies specializing in other businesses, making a move to dip their toes in the coronavirus niche via joint-ventures with hand sanitizer and even face mask companies. These are definitely unique times in the market so it’s important to understand the potential catalysts and, in turn, the lasting potential of such a catalyst.
What I’m referring to is this: Let’s say a cannabis company now had a deal with a hand sanitizer company. That headline may spark a rally for the day because “coronavirus” was mentioned. But in the long run, if that business isn’t doing the best because their main, pot business is suffering, how long can investors and traders lean on the hand sanitizer angle? I don’t have that answer. But it is something to think about especially right now. When it comes to next week, several industries – energy, gold, and biotech – will likely be in the spotlight.
Want the latest Ratings & Updates On These Penny Stocks? Download a Free Report on Any of the companies mentioned:
Barrick Gold (GOLD): Free Stock Report
Newmont Corporation (NEM): Free Stock Report
Valaris plc (VAL): Free Stock Report
Antero Resources Corporation (AR): Free Stock Report
Opko Health (OPK): Free Stock Report
Heat Biologics (HTBX): Free Stock Report
BioCryst Pharmaceuticals, Inc. (BCRX): Free Stock Report
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