Are you searching for good penny stocks to buy? In May 2022, that is more easily said than done. With the stock market down at the start of the week, sentiment is cautious ahead of Wednesday’s CPI data.

In what is expected to be one of the most important economic reports of the year, investors hope to find that inflation is starting to peak. That data is quickly followed by the U.S. Producer Price Index and initial jobless claims, due on Thursday.

However, leading up to the reports, many traders are looking to take advantage of the high volatility likely to come along with it. Right now, that has placed plenty of attention on penny stocks. Known for their inherent volatility, the heightened market fluctuations have made the current landscape ripe for day traders. In this article, we’ll take a closer look at a few names gaining ground in the stock market today.

Penny Stocks To Watch

Since penny stocks are highly volatile, it can be challenging to identify the best ones to invest in. However, thanks to quick moves in the market, they’ve been prime candidates for day traders and swing traders alike. Having the right strategy to handle different situations is vital for whatever camp you’re in. This article will look at a handful of companies that have experienced more short-term trading action this week.

1. Mullen Automotivve Inc. (NASDAQ: MULN)

penny stocks to watch Mullen Automotive MULN stock chart

One of the more popular penny stocks among retail traders this year is Mullen Automotive (NASDAQ: MULN). The emerging electric vehicle manufacturer has garnered attention thanks to its vocal management team regarding solid growth prospects for Mullen. Researchers at Hindenburg Research issued a short report last month combatting the overly bullish tone in the market. Researchers discussed how Mullen wouldn’t be able to deliver on multiple “grand promises” made. Paired with the recent bearish sentiment in the stock market, MULN stock has faced a barrage of selling pressure.

This week, MULN stock could be back on the radar after its latest update. The company said that it is testing its solid-state polymer battery testing with the Battery Innovation Center in Indiana. When scaled, the company expects this technology to deliver a 150 kWh battery capable of over 600 miles of range on a full charge. This is set for use in Mullen’s FIVE EV Crossover. With the final results of these tests expected later this month, MULN stock could be back in focus.

2. Clover Health Investments Corp. (NASDAQ: CLOV)

penny stocks to watch Clover Health CLOV stock chart

Clover Health (NASDAQ: CLOV) is another penny stock that has faced some resistance over the last few weeks. The healthcare technology company focuses on seniors with limited access to affordable care. While the market direction for CLOV stock has been bearish, its latest round of earnings has painted a more bullish picture this week.

On May 9th, after the close, Clover published its latest performance results for the first quarter of 2022. Several key highlights sparked attention on the company, including full-year revenue guidance of $3 billion to $3.4 billion. The company also expects 2022 insurance Medical Care Ratios to stay between 95% and 99%. What’s more, lives under the Clover Assistant Management grew roughly 550% year-on-year, according to the May report. This brought the figure to more than 211,000 lives.

“We continue to focus on sustainable and intelligent growth, including a deeper analysis of our specific markets, to drive our go-to-market strategy. Importantly, we believe there are multiple levers that we can utilize in order to drive another step-wise improvement in our Insurance MCR, better Non-Insurance results and lower operating expenses.”

Mark Herbers, interim Chief Financial Officer of Clover Health.

With strong growth expectations for the year, it will be interesting to see how the market reacts in May. SVB Leerink analysts appear optimistic about the company. This week, the firm maintained its Market Perform stance on Clover and raised its price target to $3. Keep in mind that the company has a previously filed mixed shelf offering, which could bring its own set of potential bearish catalysts should it be utilized.

What to Know About Buying Penny Stocks on May 10th

3. Evaxion Biotech (NASDAQ: EVAX)

penny stocks to watch Evaxion Biotech EVAX stock chart

Shares of Evaxion (NASDAQ: EVAX) gained some much-needed ground during premarket hours on Tuesday. Shares have been depressed since making a big splash last year. EVAX stock rallied to over $25 a few days after a clinical trial collaboration agreement was announced with Merck & Co. The two aimed to evaluate a combination of Evaxion’s cancer immunotherapy EVX-01 with Merck’s Keytruda in a Phase 2b study.

Why did EVAX stock implode? Shortly after, the company filed for a $24 million follow-on offering at $7. Share offerings (as mentioned in the CLOV section) are one of the wild cards, especially when it comes to penny stocks. These small companies will take advantage of bullish market conditions to raise growth capital in many cases. As with EVAX, that capital comes with heavily discounted prices, which can trigger selling.

Moving ahead to this week, EVAX stock is back on the radar. Not only is it a low float penny stock that traders have been watching, but Evaxion also announced the successful production of personalized cancer therapies in a Phase 1/2s clinical trial of its EVX-02 platform.

“With the release of the final batch, we confirmed our manufacturing process, which we believe will allow us to progress our DNA cancer immunotherapy programs into larger global trials to explore the clinical benefits of the compounds further. We have again demonstrated our capabilities to timely deliver personalized cancer treatment tailored to the unique cancer profile of every patient in a clinical trial.”

Birgitte Rønø, Chief Scientific Officer of Evaxion

With this latest spike for EVAX stock, early momentum has led to growing interest on Tuesday.

What Are Penny Stocks?

Penny stocks are shares of companies trading for under $5. It’s best to approach these types of investments with caution as they can become highly volatile. With the way things are in the stock market today, the environment has become very choppy. If you’re new to trading or new to penny stocks, it’s good to have a strategy in mind and learn the basics before diving into these uncharted waters. These articles can help:

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