Last week was one wild week for penny stocks. While I won’t argue that July had been a hot and cold month for small-caps, the final days were definitely some of the most active. It really kicked off with the massive news-catalyst-fuel move in Kodak stock. Shares of Eastman Kodak Company (KODK Stock Report) surged from $2.13 on Monday to highs of $60 by Wednesday. Where are they as of the end of July? The KODK stock price fell more than 50% by the end of July from its high price. Shares finished the week at $21.85.
I’ve seen people post of making 6 figures on that trade and others talking about losing it all. The biggest differentiator after looking through countless discussions and things like back posts is this: the ones who made money (for the most part) had a plan and actually ended up leaving money on the table. That’s the sticking point when it comes to penny stocks though, right? When is it time to sell? What if it keeps going higher? That “last stock” went to “$X” though, so won’t this one do the same?
Psychology of trading is probably one of the most important things to have a handle on when it comes to penny stocks. Volatile swings can bring big gains. They can also – as with KODK – result in paralyzing losses too. What I will say, without getting off-track, is that making money and leaving some “on the table” is far better than having a big paper gain, hoping the stock goes higher, only to hold too long and for a loss. Many of us have been there, I’m sure.Trading Penny Stocks On Robinhood & Other Brokers
At the end of the day, if a stock’s trend is truly strong, a worst-case scenario is you sell for a smaller profit, then buy back in as the stock goes higher. For this reason, some traders tend to buy penny stocks in tiers so as to scale in or scale out of a trade, in pieces.
While the cost average is likely higher than buying an entire position all at one price, the strategy allows traders to take advantage of a trade if it continues heading higher. It also allows traders to mitigate risk a little better even if a trade falls apart – Click For More Information On Tiered Trading Strategies
There are millions of new traders in the stock market today. Thanks to the global pandemic, people are stuck at home, many without jobs, looking for ways to make money. Penny stocks are cheap, can produce quick gains, are have been popularized by the entertainment industry. So it’s no wonder that Robinhood – one of the fastest-growing brokers – has seen a spike in trading activity for penny stocks specifically. However, even if you use another broker, the same ideas hold true.
[Read More] Best Penny Stock Brokers For 2020
People want to make money with penny stocks without taking the time to gain knowledge and education. So if that’s you, take a moment, look at some of our beginner resources, or even take it a step further and learn from traders with experience. If you’ve got a handle on the basics, then it’s time to start putting your list of penny stocks together for the start of August. Are any of these names going to join it?Robinhood Penny Stocks To Watch #1: Biolase Inc.
The first on this list of penny stocks on Robinhood to watch this week is Biolase Inc. (BIOL Stock Report). Though it hasn’t really made a clear up or down-trend, BIOL stock has seen some big spikes over the last several months. However, in general, even after spiking, the penny stock tends to settle back down between $0.37 and $0.40.
Staying on this technical topic, something to also note is that since June, the average daily trading volume of BIOL has increased substantially. Prior to this period, a “big day” would be around 4 million shares traded. As of this week, the daily average volume is around 9 million shares traded. Also, there are more than 13,000 users holding shares of it on Robinhood.
BIOL falls into the coronavirus penny stocks category. The company focuses on dental products; specifically, manufacturing dental lasers. If you haven’t followed our previous updates on BIOL, you might still be confused as to how it’s a COVID stock.
Back in June, Biolase tweeted that it will conduct a presentation via webinar. “This program will cover the latest applications of technology in the Dental Clinic. We’ll dive into #Periodontal, #Restorative and #DentalHygiene specific applications of #dentallasers, and HOW to increase productivity and promote practice growth post-#COVID19.”
This month the company announced more COVID-related news. Biolase reported that its Epic Hygiene dental laser met recent guidance from the CDC. The Center recommended not using ultrasonic scalers to prevent the transmission of COVID-19. Furthermore, a look at the company’s filings will also show several 13G statements suggesting institutional ownership has grown. BIOL stock gapped up after hours on July 31st so it will be interesting to see if that momentum continues in August.Robinhood Penny Stocks To Watch #2: Sunesis Pharmaceuticals
Sunesis Pharmaceuticals (SNSS Stock Report) is another one of the penny stocks on Robinhood to watch this week. Friday’s session saw a spike in both price and volume. That came just as the lunch hour was ending and SNSS stock continued trading at higher levels for the remainder of the day. There weren’t any headlines to go with it but an 8-K filing shows that a recent financing was set to close on July 31st. In its previous announcement related to that financing, Sunesis said it wants to use the funds for the ongoing development of PDK1 inhibitor SNS-510.
SNS-510 is a PDK1 inhibitor. In brief, PDK1 can be overexpressed in breast, lung, prostate, hematologic and other cancers. Sunesis licensed it from Millennium Pharmaceuticals, Inc., a wholly-owned subsidiary of Takeda Pharmaceutical Company Limited. It’s the largest pharmaceutical company in Asia and one of the top 20 largest pharmaceutical companies in the world by revenue. “For our first-in-class PDK1 inhibitor, SNS-510, we remain on track to file an IND by year end,” said Dayton Misfeldt, Interim Chief Executive Officer of Sunesis, earlier this year.
Keeping this in mind, SNSS stock’s Friday is something to note. The closing of the financing to advance SNS-510, in addition to its current pipeline is in the discussions this weekend. There are more than 16,000 users on Robinhood holding shares of SNSS stock as well. Considering this surge, will this get added to your list of penny stocks next week?Robinhood Penny Stocks To Watch #3: BELLUS Health Inc.
Sometimes we see higher-priced stocks drop into penny stock territory. They either rebound, like we saw with Amarin Corp. (AMRN Stock Report) earlier this year, or they essentially implode like we saw with Hertz (HTZ Stock Report). That is something I think that is still unfolding for BELLUS Health Inc. (BLU Stock Report) right now. The stock went on one of the most epic rallies from 2018 to 2020. It moved up from $1.48 to highs of $12.03.
On July 6, BELLUS reported that it did not meet its primary endpoint in its Phase 2 RELIEF trial of BLU-5937 to treat chronic cough. In the trial, the drug was well tolerated, with no serious adverse events reported. However, it didn’t meet its primary endpoint of reducing placebo-adjusted cough frequency.
When companies don’t meet endpoints, it’s also important to monitor how management responds. Is it a total loss and the company abandons the treatment altogether? Or is there hope? That came down to comments from management, which, ultimately seem to have been digested and viewed a bit more positively for the time being.
So why is BLU stock on the list right now? There haven’t been any news updates or filings from the company. However, Twitter is the place to be and specifically the twitter feed of Bellus CEO Roberto Bellini. In a discussion thread, Bellini cited several initiatives for the upcoming few months. He also discussed BLU-5937 and how it showed ‘clear activity’ in higher cough patients.
He doesn’t expect big details in the upcoming quarterly however, he cited that September could be a busy month to keep Bellus in mind. Considering more than 19,000 users on Robinhood hold shares, will BLU stock be one to buy or avoid in August? Comment below.Robinhood Penny Stocks To Watch #4: Trevena Inc.
Trevena Inc. (TRVN Stock Report) may be one of the more “high-risk” penny stocks if you can call it that. Now, it’s been one of the penny stocks to watch on the site since early June. At the time, Trevena had just announced entry into a collaboration with Imperial College London to evaluate the potential of TRV027. It’s the company’s treatment for acute lung injury contributing to acute respiratory distress syndrome in COVID-19 patients.
But that’s not what’s in focus this week. Heading into the first week of August, Trevena’s IV oliceridine will be in the spotlight. This is the company’s lead investigational asset for the management of moderate-to-severe acute pain. In June Trevena announced the advancement of the therapy through a partnership with Jiangsu Nhwa. Jiangsu holds an exclusive license agreement for the development and commercialization of oliceridine in China.
On August 7th, Trevena is expected to have its Prescription Drug User Fee Act date for potential approval in the U.S. This is where there could be some risk. If Travena doesn’t have a favorable outcome for this event, it could pose some issues in the market. But by the look of the options activity on TRVN stock, open interest in Call options is much greater than in Put going into the new week.
There are more than 11,000 open contracts compared to under 2,000 respectively. Could this be a sign that the market’s bullish on TRVN or is it just simply a hedge? Regardless, a little over 13,000 users hold this in their portfolio on Robinhood. Where do you stand on TRVN stock leading up to this pivotal date?