3 Trends For Penny Stocks Investors to Watch In 2022
With a new year on the horizon for trading penny stocks, many investors are working on their trading strategies for the future. And to have the best chance at making money with penny stocks, investors need to have a complete understanding of what’s going on in the stock market in the present and the future.
Right now, we are witnessing one of the most volatile stock markets that we have seen in history. This is the result of the pandemic, a new generation of investors in both penny stocks and blue chips, and other external factors. And, now, the stock market is incredibly volatile, and we tend to see significant moves frequently. Despite this, we’ve also continued to see the Dow and S&P 500 hit record highs. So before going any further, investors need to fully understand their unique tolerance for risk.
This means looking internally and knowing whether you’re interested in riskier and more volatile stocks or those that will present with greater stability. Regardless, using this alongside a consistent and well-thought-out trading strategy will be a major benefit to you. With all of that in mind, let’s take a look at three trends that penny stocks investors should know about and three penny stocks to watch.
3 Trends That Penny Stocks Investors Should Know And 3 Penny Stocks to Watch
- Meme Penny Stocks
- Omicron Variant Trends
- What To Watch With Penny Stocks in 2022
- 3 Penny Stocks to Watch
Meme Penny Stocks
Throughout 2021, many investors have seen the phenomenon of meme stocks play a prominent role in how both blue chips and penny stocks trade.
What Are Meme Stocks?
Meme stocks are stocks that have become popular as a result of viral online attention. Rather than fundamentals, these stocks tend to trade directly with the amount that they are discussed online. And as a result, we have seen double or even triple-digit percentage gains in only a short time frame.
This includes stocks such as AMC stock, GME stock, and more. The primary catalyst for these started as the subreddit, WallStreetBets, with over 10 million readers. As certain stocks gained traction in the community, investors decided to put money in, vastly increasing the price. In addition, social sentiment outside of Reddit is a great way to gauge the popularity of a stock and how it may trade moving forward. And although fundamentals are not as pertinent here, they should still be considered when making a choice.
Keep in mind that meme stocks and meme penny stocks, in particular, are highly volatile. This means that investors should consider how risky they want their portfolio to be before putting any money in. With that in mind, do you think that meme stocks are worth adding to your list of penny stocks to watch?
Omicron Variant Trends
If you’ve invested in penny stocks or blue chips over the past month or so, you likely understand that the Omicron variant is a major catalyst right now. To take advantage of this, there are a few things that investors should fully understand.
The best way to break this down is to consider the industries that are benefiting from the pandemic. And, the most obvious of these is biotech penny stocks. When the pandemic began, biotech stocks dropped in value, however, very quickly, the industry bounced back. Now, the biotech industry responds incredibly quickly to any news regarding new variants, case number increases, and so on.
And on the inverse of this movement, we see entertainment and travel stocks, which respond negatively to any case number increases or bad news relating to the pandemic. With this in mind, investors should be able to refine their strategies to meet the current state of the pandemic and its effects on the stock market.
What to Watch With Penny Stocks in 2022
As we inch closer toward the new year, there is plenty to keep track of with penny stocks. As stated earlier, the two most important factors are large fluctuations due to social media and any news relating to the pandemic. Although it is difficult to predict where the market is headed, these two considerations should be kept at the top of mind. In addition, traders should have a thorough understanding of the state of the economy in the U.S.
Right now, we are tackling high inflation rates and massive stimulus/infrastructure packages that are going in place. This has many investors worried about what the next few months could look like. And recently, news came out showing that unemployment is hitting its lowest level in decades. As a result of all of this, there is a mix of confusion and excitement about what the short and long-term future could hold.
So, for this reason, investors need to stay as up-to-date as possible with what is happening right now. This means looking at the news constantly and refining your trading strategy to match what is going on in the U.S. and the world. With that in mind, investors should continue to watch for the factors outlined above.
3 Penny Stocks to Watch Right Now
- SeaChange International Inc. (NASDAQ: SEAC)
- Yamana Gold Inc. (NYSE: AUY)
- Gaotu Techedu Inc. (NYSE: GOTU)
Are Penny Stocks Worth Buying in 2022?
As stated earlier, whether penny stocks are worth buying right now or not is up to you. Although it can be challenging to invest in penny stocks right now, it can be much easier than previously imagined with the correct information at hand. If we consider all that is going on in the world, we see a lot to keep track of.
But, with a proper and well-thought-out trading strategy alongside a thorough understanding of current market trends, making money with penny stocks can be much easier than previously imagined. With that in mind, do you think that penny stocks are worth buying in 2022?
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