We can safely put another busy week in the record books. Blue-chips and penny stocks saw increased volatility and to many, that was a welcome sight after the last few weeks of stagnated market trading. However, when it comes to volatility, you’re going to want to have a strategy in place.
You’re much more likely to capture profit with a trading plan than you are blinding buying penny stocks you “hope” will go up. Let’s face the facts, hope doesn’t pay the bills, profitable trades do.
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But hey, if you’re just looking to practice trading penny stocks based on emotion, I’d suggest practicing with a paper trading account. Before you go off into the land of “the weekend,” we’ve got a list of penny stocks to take a look at. All have seen a strong close to the week. But will that continue later next week?
Penny Stocks To Watch: Kitov Pharma
When you consider volatility and penny stocks, Kitov Pharma (KTOV Stock Report) is definitely around the top of that list. Overall, it’s been a very volatile trade but on the whole, the general trend is up so far. A few weeks ago, the company announced that it received proceeds from the exercise of $0.325 warrants. In total, the company grabbed around $6.5 million to fund the development of its oncology therapeutic candidates, and for general working capital purposes. It then raised an additional $10 million at $0.40.
It’s tough to trade penny stocks that are constantly raising money. Why? Dilution risk can play a big role. Some companies will raise funds at extreme discounts, while others will do it closer to market prices. Needless to say, Kitov has been raising money near the market even in light of the fact it was technically at discounted levels.
Why mention this? Pharma companies need money; that’s just the facts of life. That can present a lot of risks, but also the potential for these companies to grow. We’ve seen it first-hand with many of the coronavirus penny stocks that have raised millions of dollars in capital while also rallying greatly this year. Most recently, Kitov has focused on its CM-24, which supports tumor immune evasion. Immune-related treatment companies are a hot topic in the market right now. While there was no news on May 15, there was a new disclosure statement showing a 4.99% stake by Steven Boyd’s Armistice Capital, LLC. Would you consider this a bullish or bearish signal to the market?
Penny Stocks To Watch: Cassava Sciences Inc.
Wait, what? Why would Cassava Sciences Inc. (SAVA Stock Report) take a place on a list of penny stocks to watch right now? Let me explain. Cassava Sciences was an incredible breakout penny stock at the end of 2019 and the beginning of 2020. Shares ran from $1.68 on December 2 to highs of $10.95 by January 3.
By all intents and purposes, that was a big win for any penny stock. But as we’ve seen with many biotech stocks in general, a few slip-ups can be very bad for the market. While SAVA stock recovered back to highs of $10.18 from a drop to lows of $3.10 in early March, this last shock brought it back to almost where it started in December.
Cassava Sciences had some bad news come out on May 15th. Top line results from its Phase 2b study of PTI-125 for Alzheimer’s missed the primary endpoint in the trial. When you hear “missed” or “didn’t meet” the primary endpoint, you can be sure to hear someone say “look out below”. That’s exactly what happened with SAVA stock after this news broke. The stock dropped all to way to lows of $1.10 during premarket trading. But managed to not only open up at $1.70, it clawed to highs of $2.84 before closing at $2.12.
While many would write off something like this, we’ve seen plenty of times previously that biotech stocks rebound if there still something to look for. In the case of Cassava, the CEO thinks there may be. “Today’s top-line results disappoint and are not consistent with previous clinical experience for reasons that are unclear at the moment. We plan to thoroughly analyze these top-line data, and to re-analyze CSF biomarkers from study participants, to better understand the outcome of this study,” said Remi Barbier, President & CEO. So is the slight glimmer of hope from SAVA’s CEO enough to keep positive momentum in the market next week and set it up for a “dead-cat bounce” or will shares continue to slide?
Penny Stocks To Watch: Hexo Corp.
We really haven’t heard much good news from marijuana stocks lately. A troubled sector, millions in capital squandered, and a market still not completely legal have hurt the market. But a glimmer of hope on Friday may have triggered some fresh excitement across the sector.
Aurora Cannabis (ACB Stocks Report) was a former penny stock before it affected a reverse stock split earlier this week. The sector momentum stems from its last update. Aurora reported better than expected Q3 2020 earnings. Shares of ACB stock jumped over 65% on Friday following the aftermarket news on May 14. Cost savings was a big proponent to its successful quarter according to the CEO.
In light of this, many pot stocks rallied in unison with ACB stock. Hexo Corp (HEXO Stock Report) was one of them. The company hasn’t had much good news since mid-April. It’s most recent update came as the NYSE notified them they needed to get back in compliance with the minimum share price for listing on the exchange.
Could this ACB news breathe new life back into one of the few listed pot stocks under $0.50? On April 15th the company reported that it and Molson Coors (TAP Stock Report) formed a joint venture to explore opportunities for non-alcohol hemp-derived CBD beverages in Colorado. Over the last 2 days, HEXO stock has climbed from lows of $0.40 to highs of nearly $0.54 alone. Will HEXO be able to capitalize on this opportunity to reach “new highs”?
