Should These Penny Stocks Be On Your Pre
What are penny stocks? Based on the standard definition, we’re talking about stocks under $5. But obviously, there’s more to it than just price, right? Looking for cheap stocks to buy might seem like an easy task. Just find a list of stocks under $5 and find one that has a good looking name.
While that might seem like a good strategy to some, there’s more to it than just price, alone. If you’re day trading penny stocks, you’ll want to focus on things like technical analysis and event-driven catalysts. The goal is capitalizing on short-term moves in price for max-gain. The idea of a “long-term” hold entails hanging onto a position for a day at most.
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When it comes to swing trading penny stocks, the strategy is similar but the holding period is a bit longer. Traders don’t only look at short-term catalysts but also any upcoming or fundamental events as well. Look at things like biotech penny stocks. So many end up pre-announcing specific dates at a future time.
Trading V.S. Investing In Penny Stocks
This presents several scenarios including that “lovely” ‘buy the rumor, sell the news’ strategy some like to take up. Then again, if that news event ends up being a catalyst itself, it can open the bigger potential for an extended move. Again, the goal is to make a profit by holding for several days.
Should you invest in penny stocks? This is the third arm of trading. Investing in cheap stocks can be a gamble. The companies tend to raise money at low prices, they can go completely belly-up, and general market risk can become a bigger factor than with blue-chips.
Just like slight moves in price to the upside can make for big gains, the same move to the downside can equate to big losses as well. That’s why, if someone wants to invest in penny stocks, there are far more variables to consider. Today, we’re looking at 3 penny stocks that can be bought under $3 right now. Are they worth the risk?
Penny Stocks To Buy For Under $3: Iterum Therapeutics PLC (NASDAQ:ITRM)
Iterum Therapeutics PLC (NASDAQ:ITRM) is one of the premarket penny stocks to watch on Wednesday. It seems like all week we’ve seen these stocks that are gapping up before the opening bell. The risk here is that when the market opens, the stocks sell-off. That isn’t the case with all penny stocks gapping up. However, it’s a very likely scenario depending on how high shares are gapping. Needless to say, we’ve obviously seen several of these kinds of gappers continue higher at the open.
In the case of Iterum (ITRM Stock Report), the penny stock is moving higher early on September 30th. This move comes as the company announced plans to proceed with an NDA submission for its sulopenem etzadroxil/probenecid. This is the company’s bilayer tablet for the treatment of uncomplicated urinary tract infections in certain patients. The motion was initiated based on discussions at a pre-NDA meeting with the FDA.
“We have confidence in our decision to move forward with our NDA package for sulopenem etzadroxil/probenecid for the treatment of uUTI due to quinolone-resistant pathogens.”Corey Fishman, Chief Executive Officer.
On a technical note, ITRM stock has been flat for the last few weeks. Overall, it’s been in a downtrend since June. The 50 Day Moving average has also acted as a clear level of resistance. Considering this early move, will ITRM stock manage to not just break above but hold above this level?
Penny Stocks To Buy For Under $3: Allena Pharmaceuticals, Inc. (NASDAQ:ALNA)
Allena Pharmaceuticals, Inc. (NASDAQ:ALNA) was another one of the penny stocks under $3 gapping up on Wednesday morning. Shares reached highs of over $2 following the company’s latest update. The company announced entry into a $25 million convertible debt financing agreement with Pontifax Medison Finance. Pontifax is a healthcare-dedicated venture and debt fund of the Pontifax life science funds.
Upon the closing of this transaction, the company has accessed the first tranche of $10 million. It also has the option to draw the second tranche of $5 million at any time over the next 12 months. A third tranche of $10 million can be accessed by December 29, 2021. The high point of this financing is that, yes, it is a convertible financing, however, the conversion priceunder the first 2 tranches is at a price of $4.10 per share.
Allena’s (ALNA Stock Report) lead product candidate, reloxaliase, is currently being evaluated in a pivotal Phase 3 clinical program for the treatment of enteric hyperoxaluria, a metabolic disorder characterized by markedly elevated urinary oxalate levels and commonly associated with kidney stones, chronic kidney disease and other serious kidney disorders.
Similar to ITRM, ALNA stock has also experienced resistance levels at both its 50- and 200-day moving averages. Can the penny stock break above and hold at these levels or is ALNA going to see another failed breakout after this news?
Penny Stocks To Buy For Under $3: CTI BioPharma Corp. (NASDAQ:CTIC)
CTI BioPharma Corp. (NASDAQ:CTIC) is one of the penny stocks we talked about last night. During post-market trading on Tuesday, CTIC stock took off after the company’s late evening update. CTI had a recent Pre-IND meeting with the FDA. In Tuesday’s update, the company said that it reached an agreement to submit an NDA for potentially accelerating approval of its pacritinib treatment. This CTI BioPharma’s (CTIC Stock Report) candidate to treat myelofibrosis patients with severe thrombocytopenia.
CTI said that the FDA agreed to a rolling NDA submission. This is anticipated to start in “a few weeks.” CTI also expects to complete the submission during next year’s first quarter.
Adam R. Craig, M.D., Ph.D., President and Chief Executive Officer of CTI Biopharma said, “Pacritinib has demonstrated clinical benefit in treating these patients in multiple trials and now has the potential to become a new treatment option for treatment-naïve and second-line myelofibrosis patients in 2021.”
What’s interesting is that CTIC stock is testing a level that was a previous area of resistance and support in 2018. When it comes to premarket gappers, many will reach levels not seen in years. In this case, technical levels may depend on those that are years old. In 2018, the $2.50 range was a consistent levels of support for the first half of the year. After that, it has become a considerable level of resistance. Will CTIC stock manage to break and hold above these levels for the first time in 2 years, Wednesday?