Each day, investors look for new penny stocks to buy. With that, they use a number of strategies to find them. One of the more popular methods for finding the best penny stocks to “buy right now” tends to lean more toward technical analysis.
Of course things like news help when searching for catalysts. However, for the momentum-seeking day traders, the goal is to make money with penny stocks. They may hold a small core at the end of a trade and then move onto the next trade.
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This leads me to my next point which you may be asking about. Why hold a small core? While most penny stocks tend to be short term trades, others can go on to move higher even after the initial “pop”. There could be interim profit-taking that sees shares dropping from the highs. But as long as there’s a “new support” that is higher than the previous level, there could be a chance at a longer bull trend.
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Is this always the case? No, it isn’t but making the bulk of your money with penny stocks early on and managing to hold onto a small piece, gives rise to the potential of having a relatively attractive cost basis if or when this bull trend engages.
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Today we’re looking at penny stocks with momentum trends. In this list of penny stocks, you will come across a few familiar names. There are also a few new ones that might have caught some early attention. Will they be the best penny stocks to buy right now? That last question is up to you to answer.
Best Penny Stocks To Buy [or avoid]: Diffusion Pharmaceuticals
Shares of Diffusion Pharmaceuticals (DFFN Stock Report) have been trading relatively sideways ever since the penny stock made its bigger jump earlier this month. At the start of April, DFFN stock ran to highs of $0.735 after the company announced COVID-19 news. Specifically, Diffusion Pharma reported that it was researching with the University of Virginia Health and Integrated Translational Research Institute of Virginia to evaluate Diffusion’s Trans Sodium Crocetinate. This directed at patients with Acute Respiratory Distress Syndrome associated with COVID-19.
Jump to the end of the month and we see DFFN stock making another big move. The company has followed up with its plan. On April 27, Diffusion announced the pre-IND submission to the U.S. FDA of a planned clinical program using trans sodium crocetinate in COVID-19 patients displaying severe respiratory symptoms and low oxygen levels. Diffusion is also conducting expedited discussions with institutions located in areas of severe COVID-19 incidence, both in the U.S. and in Eastern Europe. That’s for determining their possible participation.
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During premarket trading, DFFN stock reached highs of $0.87 and settled just under $0.60 before the opening bell. Will this latest update help propel the penny stock through the end of the month?
Best Penny Stocks To Buy [or avoid]: Medigus Ltd.
Another one of the coronavirus penny stocks on this list, Medigus Ltd (MDGS Stock Report) was a big mover last week. But late-afternoon profit taking saw shares drop aggressively by the closing bell. However, on Monday, the uptrend continued after another big announcement from the company.
Medigus announced the signing of a collaboration agreement with L-1 Systems Ltd. for the joint commercialization of various COVID-19 related products and solutions to governmental agencies. The deal also included institutional healthcare organizations. Medigus is entitled to proceeds from sales based on a profit share model based on the scope of financing provided by Medigus. The deal has 50% of the profits being allotted in the case Medigus introduces the products, and in all other cases, of 5% of the profits.
This update follows one from last week. Medigus signed an LOI with Polyrizon for an investment and joint commercialization of biological gels. This deal was also proposed with a revenue share model. Needless to say, these back-to-back updates have kept momentum alive in the stock market today. The big question is whether or not it can continue or if it will stall like it did on Friday. What do you think will happen with MDGS stock this week?
Best Penny Stocks To Buy [or avoid]: Aytu Bioscience
Aytu Bioscience (AYTU Stock Report) was one of the penny stocks we discussed over the weekend. While the market for AYTU stock has been choppy since the first big run, the latest trend seems to have changed that. On Monday, that “change” came in a big way. Shares of AYTU jumped to over $2.30 during premarket trading and maintained levels above $1.90 during early market hours.
What’s behind the latest excitement for AYTU stock? If you recall, this penny stock was folded into another big spotlight of the coronavirus hype. With memes and posts flying around the internet about President Trump’s UV light and disinfectant injection comments, it subsequently brought more attention on the topic. In the case of Aytu, it could have benefited from this seemingly laughable instance.
The company signed an exclusive worldwide license from Cedars-Sinai to develop and commercialize the Healight Platform Technology. The Healight technology employs proprietary methods of administering intermittent ultraviolet A light via a novel endotracheal medical device. Thanks to Donald Trump’s favor of UV rays to combat coronavirus, this could be another speculative, momentum-fueled focus on AYTU stock.
Best Penny Stocks To Buy [or avoid]: Check-Cap Ltd
Another one of the momentum-driven penny stocks to watch on Monday was Check-Cap Ltd. (CHEK Stock Report). While there was no news on the company’s newswire, CHEK stock managed to rally during the early morning session. This continued a late-afternoon trend that the penny stock saw on April 24th.
H.C. Wainwright recently reiterated a “Buy” rating on the stock but lowered its price target to $2. This came after the company’s shares dipped following the announcement of a $4 million capital raise last week.
One might think that the trading activity is suggestive of some big, trendy news release. That’s not out of the question considering all of the hype-trading we’ve seen lately with certain biotech stocks. Needless to say, Check-Cap’s main focus is on colorectal cancer through the use of its screening test.
According to the company, C-Scan®, the first and only patient-friendly preparation-free screening test to detect polyps before they transform into colorectal cancer. Needless to say, CHEK stock has turned a few heads on April 27. So it will be interesting to see what, if anything, transpires.
Best Penny Stocks To Buy [or avoid]: Aurora Cannabis
Finally, Aurora Cannabis (ACB Stock Report) is among the growing list of marijuana penny stocks rallying late this month. Over the last few days, many low-priced pot stocks have moved up. Speculation related to coronavirus shut-down success has fueled momentum over the last few days. The fact that cannabis businesses received an “essential” label in certain cities has eyes on revenue performance for the first half of 2020.
Needless to say, there are certain things to be aware of when it comes to these names. Over the last couple of months, marijuana penny stocks have made short-term rallies but then faded off thereafter. In the case of Aurora, the company just renewed its at-the-market offering of up to $350 million in stock. It also completed a board-approved 1-for-12 reverse stock split. The company itself already has mounting debt on the books. But it doesn’t appear to have deterred investors from getting behind the pot penny stock this month.
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Now the future of the company rests on the hands of its new management. In an April update, Michael Singer, Executive Chairman and Interim CEO said, “Our focus today continues to be on financial discipline across the entire organization. We are taking appropriate actions to strengthen our cash position and maintain financial flexibility as we navigate through the current environment.”