4 Penny Stocks To Watch This Week; Are They A “Trade” or “Fade”?
When you look for penny stocks to buy, what do you look for? Are you looking for chart trends or are you searching for certain fundamentals? There are also a number of investors looking for penny stocks to buy that are trending in social media.
But the main thing to understand is that you need to do the research and understand why you’re trading what you’re trading. Just buying stocks on a whim or “gut feeling” doesn’t necessarily justify a reason to invest in penny stocks.
So what are some things that actually get investors excited about certain stocks? Well, as we’ve seen this month, news has played a big role. Many of the penny stocks that have exploded this year came out as coronavirus stocks.
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Speculation initially drove momentum but then a number of these COVID-19 stocks became true competitors in the biotech sector. Lately we’ve seen other sector moves that include marijuana penny stocks, psychedelic stocks, and of course, health care penny stocks. But with the emergence new innovation, there are plenty more penny stocks to watch right now. We’re taking a look at a few trending names on Thursday. Do you have these as penny stocks to trade or will they fade before the end of the week?
Penny Stocks To Trade [or fade]: Seneca Biopharma
Shares of Seneca Biopharma Inc. (SNCA Stock Report) jumped for another week this week. It followed an interim breakout that we discussed last week. At the time, Seneca Biopharma had reported its Q1 results for 2020 on Friday. The company has also affirmed guidance that the data readout from its non-GCP Phase II trial is expected during the second half of 2020.
The trials is evaluating its NSI-566 for the treatment of chronic ischemic stroke. As a result of feedback received from the FDA, Seneca believes that its existing Phase 1 and 2 trial results support moving into a Phase 3 clinical study for ALS. This week, however, the big move hasn’t been accompanied by an apparent catalyst. There’s been no news reported nor related filings. In these cases it’s important to understand that the move hasn’t been confirmed by anything other than market momentum.
SNCA stock also carried with it a lower float. In this case, volatility can play a big role in large swings up and large swings down. However, until new updates come out, the last piece of information to go off of which is the company’s last earnings report. Does this have anything to do with its plans for a Phase 3 trial for ALS?
Penny Stocks To Trade [or fade]: Xtant Medical Holdings
Another biotech penny stock taking-off on Thursday was Xtant Medical Holdings (XTNT Stock Report). Shares of XTNT stock jumped to early highs of $3.50. That’s considerably higher than its previous close of $0.67. Was there news today? No but as we continue preaching, it’s not always about news. You need to monitor filings of penny stocks as well.
In this case, that’s where we found the initial catalyst for the massive move in XTNT stock this week. OrbiMed Advisors filed a 13-D showing a majority stake in the company. Specifically, its position represented 77.7% of the company, now owned by OrbiMed. This isn’t just any firm. OrbiMed has completed deals with over 135 companies listed on its website. Shares have already been halted several times this morning.
This large stake comes after a troubled first quarter for the company. Revenue for the first quarter of 2020 was $14.8 million, compared to $16.7 million for the prior-year period. Furthermore, the company said COVID-19 restrictions haven’t helped either. Sean Browne, President, and CEO explained “Sales for the first two months of the first quarter of 2020 were tracking in-line with our expectations. However, as the COVID-19 outbreak escalated and various restrictions related to elective surgical procedures were implemented, we saw a dramatic decline in sales during March. As almost all of our spinal procedures are considered elective, we expect significant reductions in our revenue will continue until such restrictions are lifted.”
Penny Stocks To Trade [or fade]: MYOS RENS Technology Inc.
MYOS RENS Technology Inc. (MYOS Stock Report) is another low float penny stock to watch right now. The overall market for MYOS stock has been very quiet. On average the penny stock trades less than 50,000 shares a day. Yet it also has an outstanding share count of under 12 million. So by all accounts, this could be a volatile beast to watch.
Why is MYOS stock on the move today? The company announced that it has partnered with GetHealthy.store. It is an e-commerce platform serving a network of over 1,000 anti-aging practitioners nationwide. According to the company, MYOS believes that this platform “will greatly increase the level of awareness, education of, and encourage the adoption of, MYOS’ products among medical practitioners and their patients.”
This comes just one week after the company’s last deal. On May 14, MYOS signed an agreement with Victor Medical Company to distribute its Veterinarian Strength MYOS Canine Muscle Formula® nutrition products through VMC’s extensive distribution network across the Western United States. “We believe our partnership with VMC will enable MYOS to greatly expand its commercial footprint across the United States,” stated Joseph Mannello, CEO of MYOS. Given the float and obvious irregular trading volume, is MYOS stock one to trade or fade today?
Penny Stocks To Trade [or fade]: Sonim Technologies
Sonim Technologies (SONM Stock Report) caught a surge of momentum on Thursday. This came after the company announced a new product launch. Shares of SONM stock gapped up in the morning to pre-market highs of over $1.60. But by the opening bell SONM pulled back from those highs to officially open at $1.32. Following a continued decline during the first hour of trading, shares of SONM stock have attempted to reverse course. The question is will it be able to break above its trendline or will that act as resistance for the rest of the session?
The company announced partnered with communications providers, Cradlepoint, Inmarsat Government, JPS Interoperability Solutions and Rajant. This was to launch the Rapid Deployment Kit (RDK-3). RDK-3 is an all-in-one, portable communication solution designed to provide emergency and public safety teams with reliable access and connectivity. Sonim RDK-3 has been deployed in hospitals, power plants, and with state and federal agencies throughout the U.S.
“Wildfires, hurricanes and other natural disasters pose communication challenges for first responders ranging from limited or no access to a network to lack of expertise required to set up network connectivity,” said John Graff , CMO, Sonim Technologies. Will this be enough to spark a move higher before the end of the week or is SONM stock set to slide by Friday? Let us know in the comments.