10 Penny Stocks to You Should Have on Your Watchlist
Dear Penny Stock Millionaire,
Penny stocks are on fire lately. There are SO many great opportunities in the market right now.
Today, I’m going to share 10 of the best biotech stocks under $10 to watch this year.
Personally, I don’t like trading biotech stocks. I find them too choppy. But that doesn’t mean they don’t create opportunity. You just have to know what you’re good at. And I know I’m not good at trading biotechs.
That said, I can’t ignore a perfect pattern. I traded CYDY when the perfect multi-day breakout pattern presented itself. Biotech stocks got a nice boost at the end of 2019. I don’t know how long it’ll last, but when a stock sector is trending, I can’t ignore it.
As a teacher, I have to provide information and alerts to my students, so I can’t ignore possible opportunities. My goal is for my students to be better traders than me.
How to Find the Best Penny Stocks
The best way to find penny stocks to buy in 2020 is to use your stock screener. Search for the biggest percent gainers each evening and morning. Check for any news catalysts or reasons for price increases. Then check the chart for patterns.
I recommend all my students use StocksToTrade. It blows my mind when students ask me how I find stocks because I say it over and over: use StocksToTrade.
I always check the biggest percent gainers throughout the day. I’ll also look back on any recent runners to see if there’s potential for dip-buying a morning panic. That’s one of my favorite patterns right now.
The best penny stocks to trade are ones that provide predictable chart patterns. I don’t base my trades on a company’s fundamentals. If I’m in a trade, it’s because I like the chart pattern, volume, volatility, and (hopefully) a news catalyst.
The cheapest stocks trade on the Nasdaq, OTCBB, or Pink Sheets exchanges. I prefer stocks listed on Nasdaq and OTCBB. They have enough volume and liquidity for the type of plays I like.
Once you have a list of stocks from your scanner, you can create a watchlist of potential penny stocks to trade. Sort your watchlist based on the potential plays you’re looking for, whether it’s a morning spike, a morning panic, or a short squeeze.
You also need the right broker to execute your trades. Some of the bigger firms won’t even show penny stocks on scans or let you buy them. They think they’re too risky. Executions can also be tough if a stock is moving quickly.
Alright, now that you know how to find these stocks yourself, let me give you an example.
Below I’ve divided the top 10 best stocks to watch into two categories…
Biotech Stocks Under $10 to Watch
Oncolytics Biotech Inc. (NASDAQ: ONCY)
This Canada-based company is a development-stage pharmaceutical company that focuses on drugs for treating cancer.
ONCY started moving near the beginning of December, following a press release highlighting preclinical data for a drug treatment for multiple myeloma. The stock then had a few technical multi-day breakouts and a huge short squeeze on December 31.
It also announced another upcoming conference in late January where the company will present data from a study on treatment for pancreatic cancer. I won’t try to guess whether the data will be good or bad. I’ll watch for the market’s reaction to any news.
After stocks have already been up trending for a few days like this, I start watching for morning panics. Then I dip buy when the stock bounces off a support level.
CytoDyn Inc. (OTCQB: CYDY)
This American company focuses on the clinical development of treatments for HIV. Its lead product is a therapeutic anti-viral agent that’s in multiple phases of testing for other treatments, including a Phase 1b trial for breast cancer.
The company released news about a definitive agreement with another company to market and distribute its lead product (which doesn’t even have FDA approval yet).
The news brought in the hype and volume … and an increase in price. I bought just before the market close on December 26, after the stock broke the area of consolidation on the daily chart. It was a technical breakout.
I held this one overnight for a morning gap up. And I sold the next morning for an 11% gain.
Cassava Sciences, Inc. (NASDAQ: SAVA)
Cassava Sciences, Inc. is a clinical-stage drug development company. Its lead product is in Phase 2 clinical trials for the treatment of Alzheimer’s disease.
The company released some news that clinical results from its Phase 2 study were presented at an international conference.
This creates hype and excitement in the stock, which brings in volume. It started gaining momentum after the news. And the company recently disclosed that the CEO bought additional shares of the company in December. (That’s also good news.)
Savara, Inc. (NASDAQ: SVRA)
Savara Inc. is an orphan lung disease company. They have two main products in various phases of trials for the treatment of lung infections.
The stock started moving on news that the FDA granted Breakthrough Therapy designation for its lead product Mogradex, an inhaled treatment for lung infections.
The volume is fading since the day it had a gap up on massive volume. If it breaks through a support level, it could be a good shorting opportunity. But be careful. Shorting is a crowded niche right now. Don’t ever short a stock on its first green day with large volume or news.
Wait for the stock to crack a support level. This stock has a history of huge gap downs, so be careful with any long position.
Iveric bio, Inc. (NASDAQ: ISEE)
Iveric bio, Inc. develops treatments for retinal diseases. Its product is in Phase 2b trials for the treatment of age-related late-stage macular degeneration.
The stock originally started gaining momentum after it released its earnings report two months ago. Earnings winners can run farther than you think. Earnings are added value based on fundamentals. Don’t trade them the same as fluff news.
Trillium Therapeutics Inc. (NASDAQ: TRIL)
This Canadian company develops therapies for cancer treatment. Its lead product is in Phase 1b clinical trials.
The stock had a small increase in volume when it released earnings in November. But it really started moving when there was a technical breakout over the 52-week high of around 43 cents. Since then it’s had two more multi-day breakouts and a huge short squeeze on January 9.
I traded this stock twice recently, dip-buying morning panics.
The Best Penny Stocks Under $1 to Watch
OWC Pharmaceutical Research Corp. (OTCQB: OWCP)
OWC Pharmaceutical Research Corp. is an Israel-based company that researches and develops cannabis-based medical products to treat various conditions through its subsidiary One World Cannabis Ltd.
Cheap marijuana stocks got a boost of interest at the end of 2019. I’ll be watching to see if the trend continues.
South Beach Spirits, Inc. (OTCPK: SBES)
South Beach Spirits Inc. is a Florida-based company that develops, manufactures, and markets alcoholic beverages.
This is an ultra-low-priced stock that’s been running on increased volume. I bought this on December 27, before the market close. It’s was a recent runner having a first green day. I held overnight and sold into the morning gap up.
Texas Mineral Resources Corp. (OTCQB: TMRC)
Texas Mineral Resources Corp. is an exploration-stage mining company. It explores, acquires, and develops mineral properties in the U.S.
The stock’s been running on increased volume after an announcement that its pilot processing plant will be operational within 90 days. The news was released on December 16.
Inpixon (NASDAQ: INPX)
Inpixon is an analytics company that offers security solutions and context-based marketing services. It services shopping malls, airports, and government agencies.
The stock started seeing higher-than-normal volume after the company’s CEO provided a business recap and outlines plans for 2020. The company was also featured on a Yahoo Finance video showing its technology that could help shoppers find what they’re looking for in a store faster and easier.
The Bottom Line
I trade penny stocks because they can follow predictable patterns. These stocks can really gain momentum when they’re hyped up on product releases, earnings, or an exciting contract announcement.
These news catalysts bring in volume, which can create volatility and bigger price moves.
Remember, most of these companies are complete junk. No matter how exciting the news is, the price will come back down 99% of the time.
I take the meat of the move and get out. If the stock doesn’t do what I’m expecting, I cut losses quickly. That’s rule #1.
If you buy one of these stocks and hold and hope, you’re setting yourself up to be burned. Keep an eye on stocks like the ten on this list, and never stop learning.
Editor, Penny Stock Millionaires