Penny stocks are the wild west of the stock market. Fast-paced, unpredictable, and laden with potential treasures. And in this vast landscape, one metric stands out: volume. It’s like the heartbeat of a stock, echoing its vitality and momentum. Today, we’re diving deep into the most active penny stocks and the role volume plays in their dance.
Volume: The Pulse of Penny Stocks
When we talk about “active” penny stocks, we’re often referring to volume. But what is volume? Simply put, it’s the number of shares traded in a given period. And in the world of penny stocks, volume speaks volumes.
Why Volume Matters in Penny Stock Research
- Indicator of Interest: High volume indicates strong investor interest. It’s like a spotlight on the stock market stage.
- Price Momentum Clues: A surge in volume can precede price movements, offering potential buy or sell signals.
- Liquidity Boost: High volume stocks are easier to buy or sell. Liquid markets mean faster trades.
- Market Confidence: A consistent volume suggests stability and can indicate a general market confidence in that particular stock.
- Visibility: High volume stocks get more coverage. They’re discussed in forums, covered by analysts, and become the talk of the town, which can further influence their movement.
High Volume: Not Always a Rosy Picture
While volume can be a trader’s best friend, it’s not without its quirks. A word of caution for those navigating these waters:
- Don’t Be Fooled by the Buzz: Just because there’s high volume doesn’t mean everyone’s buying. Sometimes, bad news can send trading through the roof.
- Expect the Unexpected: Penny stocks with bustling activity can swing wildly. Prices might change before you can blink.
- Look Before You Leap: A sudden surge in volume doesn’t guarantee lasting momentum. Always try to get the full story.
- External Factors: Sometimes external events or manipulated news can artificially inflate volume. Being aware of the broader market and world news can help in understanding such anomalies.
- Crowd Mentality: Just because everyone’s talking about a high-volume stock doesn’t mean it’s a sure bet. It’s essential to do your research and not get swayed by the herd.
Navigating the penny stock terrain with volume as your guide can be rewarding. But like every journey, it’s essential to be equipped with knowledge, a discerning eye, and a pinch of caution.
Finding the Sweet Spot with Volume
Think of using volume in penny stock research as a balancing act. Much like searching for treasure, sometimes you strike gold, while at other times, you might hit a dud. By marrying volume insights with other key indicators and complementing them with thorough research, traders can be steered toward wiser decisions.
Moreover, volume is more than just numbers. Indeed, it tells a story, and it’s imperative to interpret it correctly. A sudden surge in trading activity could be influenced by a plethora of factors, whether it’s groundbreaking company news or mere market speculation. Consequently, recognizing the difference between genuine interest and fleeting hype becomes pivotal.
On the other hand, it’s crucial to remember that volume shouldn’t stand alone in your analysis. For a more rounded perspective, it’s beneficial to amalgamate volume data with other technical indicators, such as moving averages or the relative strength index. Together, these insights can pave the way for a broader understanding of a stock’s potential trajectory.
In conclusion, the importance of thorough research cannot be overstated. Beyond the bare numbers and charts, taking a deep dive into the company’s fundamentals, recent news, and industry trends can offer invaluable insights. Furthermore, high trading volumes often ignite discussions in trading communities, forums, and news outlets. Actively tuning into these conversations can provide traders with a keen sense of prevailing market sentiments.
Penny Stocks to Watch
- Tellurian Inc. (NYSEAMERICAN: TELL)
- Outlook Therapeutics (NASDAQ: OTLK)
- BioXcel Therapeutics (NASDAQ: BTAI)
- Aldeyra Therapeutics (NASDAQ: ALDX)
- Cellectis (NASDAQ: CLLS)
Tellurian Inc. (TELL)
Rising natural gas prices have traders looking at companies in the sector. Tellurian, a liquified natural gas company, has experienced an uptick in momentum that coincides with this move. One of the most significant developments also promoting optimism in the company is a big deal with Baker Hughes.
The two inked a deal securing eight main refrigerant compression packages. This is for the first phase of the Driftwood LNG project, which has been a topic of discussion for Tellurian for quite some time.
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“This agreement builds on the established collaboration between Baker Hughes and Tellurian as we continue to execute on our scope for the Driftwood Pipeline 200, which includes providing zero-emissions ICL compressor packages for their first deployment in North America. Leveraging our 30 years of experience in LNG and broad portfolio of technologies for the natural gas value chain, we are pleased to support Tellurian also for the Driftwood liquefaction plant with our gas technology solutions,” said Lorenzo Simonelli, chairman and CEO of Baker Hughes.
Initial production is slated for 2027.
Outlook Therapeutics (OTLK)
Shares of OTLK stock have been pushing higher for over 2 months thanks to multiple catalysts. A lot of the positive sentiment has stemmed from the news at the end of September that Outlook requested a meeting with the FDA.
Outlook wants to discuss the complete response letter from August regarding the biologics license application for its ONS-5010. The treatment candidate is Outlook’s wet AMD drug. “Our belief remains unwavering that the retina community needs an FDA-approved ophthalmic bevacizumab to deliver an alternative on-label bevacizumab option for patients with wet AMD,” said Russell Trenary, President and CEO of Outlook Therapeutics, in a September update.
This week news from the company highlighted an upcoming presentation at Guggenheim’s Inflammation, Neurology & Immunology conference. Management will host a fireside chat next Tuesday at the conference in addition to 1 on 1 meetings.
BioXcel Therapeutics (BTAI)
BioXcel Therapeutics recently disclosed favorable findings from a third-party audit. This was concerning data integrity at a TRANQUILITY II Phase 3 Trial site. There was no further misconduct or fraud found beyond a previously reported instance.
The audit also supports the reliability of the trial data and a potential supplemental New Drug Application (sNDA) submission for BXCL501 for treating agitation in probable Alzheimer’s disease.
The positive audit results, alongside the statistically significant trial data, may bolster investor confidence. That may be one of the reasons that BTAI stock has climbed. This week has continued placing a spotlight on the company after Bioxcel reported that the Centers for Medicare & Medicaid Services issued a permanent and product-specific J-Code for its IGALMI for treating agitation related to schizophrenia and certain bipolar disorders.
The company also gave its official notice of upcoming financial results. BioXcel reports its third-quarter earnings on November 14, 2023. Since these come before the market opens on that Tuesday, these could be a potential catalyst to factor in if BTAI stock is on your watch list.
Aldeyra Therapeutics (ALDX)
Possibly one of the most active penny stocks today is Aldeyra Therapeutics. The immuno-mediated treatment company, like Tellurian, inked a deal with a notable industry leader. In this case, Aldeyra signed a deal with AbbVie Inc.
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The deal sees AbbVie gaining an option to buy a co-exclusive license to develop and commercialize reproxalap in the US. There is also an exclusive license to develop and commercialize reproxalap outside the US. What does Aldeyra get in return? The company receives a refundable option fee of $1 million as well as an upfront payment of $100 million minus fees. Aldeyra would be eligible to receive up to $300 million in milestone payments.
Reproxalap is being developed as a potential treatment of dry eye disease.
Cellectis (CLLS)
Cellectis is another one of the top penny stocks as far as trading volume is concerned. The company is developing gene-editing tech to create new therapies including those for cancer. This week Cellectis announced a strategic collaboration and investment agreement with AstraZeneca.
The company will receive $25 million upfront. It is also eligible to receive an investigational new drug option fee as well as milestone payments between $70 million and $220 million depending on the product candidates.
Cellectis said it will use the proceeds for research and development expenses incurred in developing its programs. Its clinical-stage assets, UCART22, UCART123 and UCART20x22 will remain under Cellectis’ ownership and control.
In response to the milestone, Marc Dunoyer, Chief Strategy Officer, AstraZeneca, and Chief Executive Officer, Alexion, AstraZeneca Rare Disease, said: “The differentiated capabilities Cellectis has in gene editing and manufacturing complement our in-house expertise and investments made in the past year. AstraZeneca continues to advance our ambition in cell therapy for oncology and autoimmune diseases as well as in genomic medicine, which has potential to be transformative for patients with rare diseases.”
