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Should These Penny Stocks Join Your Watch List On Friday?

It’s late, I know, but money doesn’t sleep and neither do penny stocks. Extended market hours can be some of the most important times to do research and monitor activity. The reason why has a lot to do with when companies release news, publish filings and conduct conference calls.

It’s also a time where some analysts will choose to release new or updated ratings for stocks. Whether it’s blue-chip stocks or penny stocks, you’re bound to see high levels of info before the open and after the close. Since most stocks continue trading before and after the bell, you’re likely to see some big swings following certain catalysts.

Take this afternoon, for instance. While it isn’t a penny stock anymore, Nio Inc. (NIO Stock Report) has become one of the penny stock unicorns. We started following it after it dropped like a rock last year. Along the way, the company took steps to rewrite its troubled history. Fast-forward to this year and the once-penny stock reached all-time highs of $20.97 this week. It was definitely a parabolic move and likely on that would see consolidation at some point.

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However, that consolidation seems to have quickly turned into a sell-off after the market closed on Thursday. Nio, Inc. announced a proposed offering for 75 million shares. And the rest, they say, is history. NIO stock closed the regular session at $19.88, just about a dollar shy of its all-time high.

Following this news, however, NIO broke down to nearly $18 before the final close of after-hours trading. On the flip-side, however, you’ve got some of the names on this list of penny stocks that experienced aftermarket momentum on Thursday. Can that continue through the end of the week?

Best Penny Stocks To Trade [or fade]: Just Energy Group Inc.

Just Energy Group Inc. (JE Stock Report), like a lot of energy penny stocks, hasn’t had the easiest year this year. There’ve been a few intermittent spurts of momentum here and there. But overall, JE stock has been in a perpetual downtrend this year. In January, the penny stock was trading above $1.80 and last week, JE hit a new 52-week low of $0.282.

While the past week has been “stronger” than previous, the biggest momentum has come in the last few days. Thursday was JE stock’s highest volume day of August but that got an “upgrade” after the close of the stock market today. Around 5:30 PM EST Just Energy announced the approval of its recapitalization plan at special meetings of security holders held earlier today.  

This is part of Just Energy’s plan to “strengthen and de-risk the business and position” for sustainable growth as an independent industry leader. The recapitalization improves Just Energy’s financial flexibility with an equity injection of over $100 million. It reduces net debt and preferred shares by approximately $520 million. The implementation of the recapitalization is expected in September 2020.

Considering this was after the close, where will JE stock head before the weekend? While the stock closed around $0.31, the post-market saw JE reach highs of $0.4444. Is it set to “gap and go” or “gap and trap” on Friday?

penny stocks to trade fade Just Energy (JE stock chart)

Best Penny Stocks To Trade [or fade]: Trevena Inc.

Trevena Inc. (TRVN Stock Report) is another one of the post-market movers from Thursday. It has been one to watch since early June. At the time, shares were trading around $1.40 and the company had just entered into a collaboration with Imperial College London to evaluate the potential of TRV027. However, the company’s lead investigational asset for the management of moderate-to-severe acute pain was the point of focus this month. Heading into the first week of August, Trevena’s IV Olinvyk (oliceridine) was approved by the US FDA for intravenous use in hospitals and other controlled clinical settings. 

However, a stock offering put the breaks on any extended bullish sentiment. Since reaching highs of $3.68 this month, TRVN stock has contracted. So much so that this week it hadn’t seen lows this low since the end of June. Even the announcement of a $3 million milestone payment from its partner in China for the U.S. approval of Olinvyk couldn’t reboot the bull run. So why mention the company right now?

Well, the obvious theme of the article centers on penny stocks with aftermarket momentum. Thursday saw TRVN stock pull an about-face. After closing the regular session at $1.52, shares shot up to a post-market high of $1.82. Looking for news or filings? You won’t find either. But what we have found could be something to note.

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Shortly after the closing bell, a new analyst update came out on Trevena. Cantor Fitzgerald’s Brandon Folkes initiated coverage of Trevena with an Overweight rating. He also issued a $5 price target. Yes, this is the same Cantor that was one of the acting book-running managers for the recent offering. Will this rating be enough to continue this bullish trend during normal market hours on Friday?

penny stocks to trade fade Trevena Inc. (TRVN stock chart)

Best Penny Stocks To Trade [or fade]: Town Sports International Holdings Inc.

Town Sports International Holdings Inc. (CLUB Stock Report) has benefited greatly from sentiment in my opinion. It hit our scanners earlier this month after some positive sentiment focused on reopening gyms. However, this latest move was short and sweet. CLUB stock jumped from under $0.50 to $1.20 within 3 days then steadily declined ever since. This week, shares seemed to settle out around its 50 Day Moving Average (for now).

On Thursday after the closing bell, CLUB stock promptly bounced off of this technical level. After-market trading saw the penny stock reach highs of $0.62 after closing the regular session at $0.59. There weren’t any headlines nor were there any new filings. In fact, in its last update, the company reported that it received a non-compliance warning from Nasdaq for failing to file its quarterly reports. So why on earth would CLUB stock be an after-hours mover?

In this case, I think a lot of it has to do with market sentiment. If you search for a few related headlines, you’ll find things pointing to positivity about gyms. Not only did headlines come out of New York state earlier this month but more updates came this week from Arizona. One of the previous hot spots shed some new light on the topic. Gyms, theaters, water parks and bars that serve food could reopen in metro Phoenix and some other Arizona counties on Thursday.

The Arizona Department of Health Services updated its data dashboard at 9 a.m., and the metrics show that businesses in Maricopa and Pima counties may reopen, albeit at a limited capacity. Needless to say, CLUB stock jumped after hours so it will be interesting to see if that momentum carries over into the end of the week.

penny stocks to trade fade Town Sports International Holdings Inc. (CLUB stock chart)

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