Penny Stocks To Watch After Recent News
If there’s one thing we’ve learned about penny stocks it’s that they can break out at a moment’s notice. On top of that, there are usually catalysts at play during the initial “big move”. But finding those catalysts isn’t always as easy as pulling up the penny stock’s news. However, I believe that it’s important to understand why a company’s stock is running even before adding it to your list of penny stocks.
Why? Well, these cheap stocks trading under $5 are highly volatile. Small moves in price equate to big percent changes. While this is a known fact, some other things can be in play with penny stocks that aren’t as obvious. Smaller share structures can lend themselves as easy prey for momentum traders to take advantage of.
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In these cases, some people may trade certain penny stocks simply because there’s a low float, and with that comes the potential for a big move up. There’s a problem with that, however. If a “low float penny stock” doesn’t have regular liquidity, it could become an issue when it comes time to sell.
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Don’t get me wrong, it’s great seeing penny stocks make big moves, but if there’s no market when it comes time to sell, all you have is expensive toilet paper at the point. This is why it’s important to know why or “maybe why” stocks under $2 for instance, are moving. If it’s simply because of traders playing the share structure, that move isn’t likely to sustain itself for a longer period of time.
On the flip side, we’ve seen first-hand how penny stocks with news can go on to rally for days or even weeks. The coronavirus pandemic definitely opened more eyes to this phenomenon (if you can call it that). With this in mind, when putting together a list of penny stocks to buy or to watch, have any of these names hit your scanner?
Creative Realities Inc. (CREX)
Shares of Creative Realities Inc. (CREX Stock Report) seemingly ran out of nowhere on Tuesday. The small-cap stock reached highs of over $2.50 before 11:30 AM EST and traded its highest share volume in recent history while running over 170%. There were no headlines and no filings. So was this just a “momentum move”?
Here’s where diligence comes into play. Creative Realities is a digital marketing technology and solutions company. If you’re looking at recent trends spawned from COVID-19, you’re seeing a push to “get back to normal”. That will likely entail certain precautions so the virus doesn’t come back and shut down the economy again. One of the ideas is screening at large business centers. “Lucky” for Creative Realities, the company just posted a new update on its website.
Its “Safe Space Solution” apparently has the technology to monitor things like temperature and works with facial recognition. The company’s system also employs Artificial Intelligence to connect multiple points of entry and can be customized for compliance requirements. While this wasn’t formally announced, traders have managed to find this new info, which has apparently become a catalyst for CREX stock. Will it be able to continue this trend through the end of the month as thermal imaging stocks gain in popularity? With less than 15 million shares outstanding, the lower float could be something to take note of, given Tuesday’s momentum.
Bionano Genomics (BNGO)
Another one of the penny stocks that caught a strong boost on Tuesday was Bionano Genomics (BNGO Stock Report). While most of April has been quiet – if anything a bit down – BNGO stock has started to climb this week. The last update from the company was regarding a 54.546 million share offering at $0.33. Of course this saw share prices rip lower. But after the market had time to digest this information, it was back to a bit more of normal trading as it were. Prior to this, the company announced the launch of the largest study to date that targets identifying certain substances related to resistance or sensitivity to COVID-19.
According to Bionano, the first study of its kind is already underway in Wuhan, China and is being performed by Wuhan-based GandOmics. That service provider is using Bionano’s technology. Hannover Medical School is also launching a study involving 1,000 patients and controls. It will be consisting of COVID-19 patients and their partners and first-degree relatives as controls.
Following this, Bionano reported in late-April that the University of Iowa Hospitals and Clinics will switch their method of clinical molecular testing for patients with presumed Facioscapulohumeral Muscular Dystrophy (FSHD) to optical mapping using Bionano’s Saphyr System. The UIHC recently completed development of an FSHD assay on Saphyr and validated its results by processing patient samples for FSHD.
Following this evaluation, the UIHC is implementing this month a Saphyr-based assay into its clinical testing workflow. It seems as though this momentum has carried through the week as BNGO stock traded higher on April 28th. The penny stock has rebounded by more than 70% off of its April low so far.
Zomedica Pharmaceuticals (ZOM)
Shares of Zomedica Pharmaceuticals (ZOM Stock Report) shot up for a third day on April 28th. There hasn’t been much from the company as of late. Yet ZOM stock has managed to bounce 28% since last Friday. Aside from receiving proceeds from the paycheck protection program, nothing new has come up this week.
However, attention has been on the company ever since its April 21 update. Zomedica announced that it has completed the verification of TRUFORMA™, its point-of-care diagnostic biosensor platform, and the first assay, Canine total T4 (“tT4”) thyroxine.
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“We believe TRUFORMA™’s innovative capabilities will be a major step forward in our efforts to bring reference lab testing capabilities to clinical veterinarians at the point-of-care,” said Stephanie Morley, DVM, and president at Zomedica. “We believe that the TRUFORMA™ platform has the potential to establish the Company as a leader in point-of-care diagnostic testing of companion animals in veterinary medicine.” Whether that has something to do with this latest surge or not is to be seen. However, trading activity has continued building this week.