Top Penny Stocks Traders Are Buying Up But Can The Breakout Trend Last?
When it comes to penny stocks, it’s very hard to ignore the sheer potential. This week, we’ve already seen big breakouts from the likes of tech stocks, health care stocks, and Chinese stocks especially. But as they say, what goes up must come down and several of these plummeted aggressively by day’s end.
Yesterday we saw WAFU stock explode during premarket trading and before that IMRN was one of the high volume penny stocks to watch. We also watched as JFIN grabbed the attention of retail investors and ENOB did a “head-fake” leaving some bag-holders in its wake.
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Were those bad penny stocks to buy? That depends on how you viewed (and traded) these penny stocks. In many cases, these high volume penny stocks raced as high as $30. But all of them ended up closing much lower and falling even further during the days to follow. Ask a “classic” investor and they’ll tell you that these penny stocks aren’t worth it. That’s only based on their strategy. Investors don’t typically trade stocks and their outlook is longer term.
Penny Stocks 101: No One Goes Broke Taking Profit
But if you’re looking for penny stocks to trade, big breakouts are what you probably want. The quicker you can make money, the sooner you can look for more penny stocks to trade. And this is the key, right? Making money with penny stocks so please, don’t forget that.
No one ever goes broke taking profit and if leaving money on the table is your biggest problem, it’s not all that bad. It’s VERY important to understand, however, that parabolic moves are short-lived 9 times out of 10. So if high flying, low-float penny stocks are on your radar, understand that it could be a quick trade; not a long-term investment.
So, there’s my PSA for the day. Penny stocks are high-risk/high-reward. Taking profit along the way (a.k.a. as the stock rises), is one way to benefit from a breakout while also taking advantage of stock market momentum. With this in mind, and assuming you hate being a bag holder, will these be short-term penny stocks to buy or avoid right now?
Penny Stocks To Buy [or avoid]: Yunhong CTI Ltd. (NASDAQ: CTIB)
There’s no chill in the stock market today. If you thought Thursday’s market rout was a deal-breaker for small-caps, think again. Yunhong CTI Ltd. (CTIB Stock Report) distributes and sells rubber and plastic consumer products across the globe. Think about things like balloons and plastic film products. If it seems familiar, you’ve probably been a reader for quite some time. Late last year CTIB stock exploded “out of nowhere” then it repeated that breakout a few more times since.
What happened? The company divested one of its brands, but there weren’t too many details surrounding the actual deal. Needless to say, CTIB stock jumped from $0.58 to highs of $1.64 on December 11th followed by a big drop. January 6th it soared from around $0.89 to highs of $4.14. In April, CTIB stock rallied from $0.87 to highs of $1.80 in its first true multi-day rally and has held higher support around its 50-day moving average since.
Now, we’re seeing CTIB shares rise once again in its biggest move yet. During Friday’s premarket session, the penny stock exploded to highs of $12.45 After something big was revealed. There wasn’t a press release or sector sympathy like we saw with WAFU yesterday. In a 13D filing, the document shows LF International Pte. Ltd. now holds a controlling, 56.9% stake in the company equating to an aggregate 5.4 million share position.
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Meanwhile, the share float shows to already be extremely low. While this breakout is amazing especially if you’ve watched it since we started talking about CTIB, please be aware that this parabolic move could be risky. So, learn from the past low-float jumps we’ve seen this week if CTIB is on your list of penny stocks right now.
Penny Stocks To Buy [or avoid]: Genius Brands (NASDAQ: GNUS)
Before you start making assumptions here, understand this is a list to help you think about different penny stocks to watch. Whether or not they’ll become penny stocks to buy is up to you and the market. But what I can say is that Genius Brands (GNUS Stock Report) has been a long-standing name on countless lists of penny stocks for months.
Since we first came upon the company, and then more recently brought consistent coverage, GNUS stock has rallied from $0.33 to highs of $11.73. However, as I said above, when penny stocks go parabolic, it’s important to keep your money-making strategy in mind. As we’ve all seen, the moment GNUS stock became uncontrollably explosive, the sell-off began. Throw on a discounted share offering and it was the perfect storm for a pullback. Thursday showed some glimmers of hope and the penny stock began to recover a bit. Furthermore, during premarket trading on June 12, GNUS has begun to climb higher, still.
In relation to past raises, Genius said net proceeds will be used to grow its newly-announced digital network for children, Kartoon Channel!. It will also fund the production of additional episodes of its series Rainbow Rangers, and repay certain outstanding debt. In a corporate update, CEO Andy Hayward said, “This is an extraordinarily exciting time for Genius Brands and its assets. More than ever we are being thoughtful on how to harness the momentum of increasing viewership, and the accompanying advertiser revenue, alongside the power of the brands we have and are bringing forth.”
Will GNUS stock manage to continue this bullish reversal? Or, is this the last rally cry before pulling back further? Comment below if GNUS is on your list of penny stocks right now.
Penny Stocks To Buy [or avoid]: Party City Holdco (NASDAQ: PRTY)
Finally, Party City (PRTY Stock Report) is back on the radar following a recent pullback from its 200 day moving average. Yes, this is the same party city you shop at for your last minute Halloween costume. A few weeks back we speculated on the fact that whispers of the economy reopening sooner could benefit companies like Party City. At the time PRTY stock was trading around $0.80 and the company had filed a disclosure statement to approve a reverse stock split among other things.
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Anticipation further built around Party City’s earnings. Would they be strong or would COVID take its stranglehold like it has for countless brick and mortar retailers? On Friday we found out. Party City saw revenues decline 19.3% to $414 million on a reported basis. Retail sales dropped 20.3%. Brand comp sales dipped by 17.1% for the quarter as well. However traders remained bullish on Friday.
Wy is PRTY stock heading higher during Friday’s early session? Despite an earnings miss, traders seem to be looking at a possible “light at the end of the tunnel”. The company also announced a possible deal that would reduce its debt by 25% and raise $100 million in capital.
The retailer posted net losses of $541.5 million, or $5.80 per share. Adjusted losses were $0.28 per share. Since the end of May, PRTY stock has climbed $0.72 to highs of $2.74 and traded above $1.80 during Friday’s premarket session. Will PRTY head higher in June?
