Are There Ways To Make Money With Penny Stocks? Yes But Strategy Is Important
Can you make money in penny stocks? Yes, but there are a few things you need to keep in mind. First, these cheap stocks are incredibly volatile. Compared to blue-chip stocks like Apple of Facebook, even the slightest price movement can equate to significant shifts in value. Think about it, if you’ve got Apple trading around $115, a $1 move is almost unnoticeable. The same can’t be said for a $2 penny stock. In that case, a price change of $1 is either a gain of 50% or you just lost half of your investment value.
Based on this, many will decide to trade instead of invest in penny stocks. The quick moves tend to lend itself to a faster-paced strategy. This is one that allows traders to take advantage of quick moves in price in exchange for much greater gains. Not all penny stocks are trades, only. In fact, this year alone, we saw how investing in penny stocks can pay off big. Look at some of the penny stocks that made it big this year. All of them went on to move higher over the course of months versus days or even hours. Again, you’ve got to weigh risk and reward with each instance.
Plan out your trade or investment and have profit targets in mind. It also doesn’t hurt to have potential exit targets in place if the trade goes against you. While there are plenty of strategies to take up, tier trading can keep you in winning trades longer while allowing you to cut out of losing trades with minimal losses.
This simply entails piecing together your trade in different tiered amounts. There are articles we discuss this strategy so I won’t go too far into it here. Needless to say, the question was: Can you make money in penny stocks? Traded correctly, that answer is yes. Will any of these names be on the next list to watch?
Penny Stocks To Trade [or fade]: Gevo Inc.
There’s a new category of stocks being discussed recently. These are called “ESG stocks” and just like epicenter stocks, there are lower-priced stocks that might meet these criteria. What does ESG stand for? Environmental, Social, and Governance and the idea behind it support companies that leave a positive impact on those key areas of interest.
In my opinion, Gevo Inc. (GEVO Stock Report) could be one of these ESG penny stocks to watch. The company’s model hinges on renewables. In fact, according to Gevo, takes aim at reducing greenhouse gas emissions with sustainable alternatives. The company uses low-carbon renewable resource-based carbohydrates as raw materials.
With countries, and recently, states looking to move away from fossil fuels, Gevo remains a point of conversation. Sweden has a goal of becoming “fossil-free” by 2040. Norway also announced a move to introduce biofuel blending through its own mandate. Furthermore, California is taking that a step further. Gov. Gavin Newsom signed an order that could put an end to the sale of new gasoline and diesel-powered passenger cars in the state by 2035.
Gevo was also granted an Australian patent pertaining to methods of converting ethanol into functionalized lower hydrocarbon and downstream hydrocarbon. As you may or may not know depending on how long you’ve been a reader, GEVO’s been on the radar since the start of July. Following a recent consolidation period for the stock, shares have steadily climbed, following closely with the trend of its 50-day moving average. Can that continue this month?
Penny Stocks To Trade [or fade]: Sunworks Inc.
Sunworks Inc. (SUNW Stock Report) could be another one of the ESG penny stocks to watch this month. The company focuses on photovoltaic power systems. These are used in things like agriculture to commercial applications. Its current markets include California, Nevada, Oregon, New Jersey, Washington, and others.
The focus on renewable energy has brought companies like Sunwors to the forefront recently. What’s more, is the drive for traders to find low float penny stocks has also grown. SUNW initially began trending most recently in September after SPI Energy took off. In sympathy with SPI, SUNW shares saw an explosive rally as well. This took the penny stock to highs of $8.50 on September 24th.
One of the ongoing points of focus is the company’s pending merger with The Peck Company (PECK Stock Report), another solar company. You’ve also got companies like CBAK Energy Technology (CBAT Stock Report) also pulling massive amounts of interests into renewable names. CBAT stock is another company we’ve been discussing for weeks no. We’ve witnessed it climb from under $1 to more than $4.35 this week.
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Considering the focus on renewables, companies like Sunworks and Peck are gaining attention in the stock market today. Whether or not that same momentum can remain in play this month is something we’ll have to watch for. Monday’s session saw SUNW stock extend a 3-day winning streak.
Penny Stocks To Trade [or fade]: XpresSpa Group Inc.
Maybe one of the more controversial penny stocks we’ve watched, XpresSpa Group Inc. (XSPA Stock Report) has experienced a surge in momentum on Monday. I saw it’s controversial because it was one of the red hot penny stocks to watch earlier this summer. We saw it rally, first-hand from under $1 in March to highs of $8.82 by early June. Since then, XSPA stock has had a very hard time holding levels of support. Most recently, however, the penny stock seems to have consistently traded around the $2 mark.
On Monday, the penny stock caught one of its biggest surges in recent history. To the surprise of traders, XSPA stock jumped from $1.94 to highs of $2.24 during the early afternoon session. If you’re unfamiliar with the story behind the company, let me catch you up to speed. Yes, this is the same XpresSpa that you see in airport terminals giving light spa services to customers. Obviously, COVID-19 put a stop to that but a forward-thinking company finds other ways to survive. In light of this XpresSpa Group turned this into a way to offer outlets for coronavirus testing in airports.
Where the excitement stems from today can be found on Twitter. Liz Claman of Fox Business Tweeted, “Ahead of tomorrow’s opening of the first sub-15 min #covid19 Airport testing hub for all travelers at JFK, XpresSpa CEO Doug Satzman gives you a live tour 3P ET $XSPA I could’ve use this when I landed at LAX to see my 90-year-old mom!”
As with many of the previous “bigger moves” in the stock, XSPA has a tendency of jumping but not sustaining the move. Will that be different this time around?