No matter if you trade penny stocks or look for ways of investing in penny stocks, there are certainly plenty of choices in the stock market today. But it’s important to remember that there are factors in play that can change your initial approach. What does this mean? Let’s say you’ve found penny stocks to buy, you enter a trade and plan on holding that trade for a few days.
Enough time to see momentum come in and possibly establish new support, maybe see some news, and the company’s expecting some kind of results. You’re setting an initial profit target of 15-20% and expect to hold shares for a few days to a week. But then some news comes out on new opportunities for companies like the one you invested in; the stock skyrockets and your position is up 50%.
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Here’s where new traders show their true colors. Your goal was 15%-20% and now you’re up 50% in this example. What do you do? In a perfect scenario, a trader would take at least some profit to either cover the trade principle or cash out entirely. But in some cases, new investors let emotions take control. Because of the volatility, the stock moved up aggressively.Penny Stocks That Hit It Big In May 2020
It can also move down just as aggressively causing anyone to hold shares to either miss out on the run or see their position become a losing trade. The name of the game is to make money with penny stocks so it’s important to have a plan and stick to it. I mention this because the volatility has been crazy lately so it’s important to manage market conditions effectively. With this in mind, let’s take a look at a few penny stocks to watch before June 2020.Arca Biopharma (ABIO)
One of the trailblazers this week for penny stocks leaving the definition, Arca Biopharma (ABIO Stock Report) screamed this week. On Wednesday, the stock closed at $3.95 and on the following day, we saw ABIO stock skyrocket to highs of $22. So far it looks like the market has normalized for now.
Why did Arca Biopharma jump? The company announced a new development program to evaluate its AB201 treatment as a potential treatment for COVID-19 associated coagulopathy and the related inflammatory response. The company said it anticipates filing an IND application with the FDA in the third quarter of this year. Thanks to that headline, and the fact that it is a low-float penny stock, ABIO stock was absolutely explosive on Thursday.
But it’s important to understand that penny stocks that jump like this could have a number of outside risk factors to consider. The company needs money to continue to grow so there could be financing risk. On the other hand, it’s a low float stock as it is so market risk can also play a role. Just as quickly as low float stocks move up, they can also pull back. Needless to say, ABIO stock was one of the stars of the week when it comes to penny stocks.
The biggest question is can it stay that way or is there a lot more volatility ahead? Either way, ABIO stock is a clear example of managing your trading strategy properly and making sure to take profit. Case in point, if you held the stock overnight and bought it anywhere above $14, you’d be down on the trade simply based on the morning gap down May 29th. As the story develops, it’s important to take note of all of these things.Adaptimmune Therapeutics (ADAP)
Shares of Adaptimmune Therapeutics (ADAP Stock Report) have been on our list of penny stocks for a while now. Since January 13th, ADAP stock has been on the move. At that time, shares traded around $2.20 and saw an initial move to highs of $6. It steadily pulled back over the months to follow until reaching its 50-Day Moving Average around $2.20 once again. But ever since then ADAP stock has been on the move. This week shares officially left “the station,” well above the definition of a penny stock.
Why did ADAP stock breakout this week? Similar to my example above, Adaptimmune came out with somewhat of an unexpected and pleasantly surprising update. The company presented updated data from its ADP-A2M4 Phase 1 trial at the American Society for Clinical Oncology Annual Meeting. The data demonstrate durability and responses in synovial sarcoma, supporting SPEARHEAD-1 as a potential registrational trial. The ASCO presentation also describes a new response in a patient with lung cancer and response in a patient with head and neck cancer.
This was reported in January. Specifically, in January, the Company reported one confirmed PR in a patient with liver cancer from the ADP‑A2AFP Phase 1 trial. Subsequently, this PR has been assessed as a confirmed complete response. Adaptimmune also announced new responses in the SURPASS trial, confirming the potential for SPEAR T‑cell therapies targeting MAGE-A4 to treat a broad range of cancers in addition to sarcoma. Shares have jumped to highs of $12.10 during premarket trading on May 29.Sonoma Pharmaceuticals (SNOA)
Keep in mind not all penny stocks are trading for pennies, and that’s ok. Based on the definition, we’re talking about stocks under $5. In this case, Sonoma Pharmaceuticals (SNOA Stock report) has been trending around the $5 level for months. While it’s up slightly from its March $3.55 lows, the SNOA stock trade has been relatively stagnated. But that changed in a major way for the penny stock this week.
Sonoma announced late in the afternoon on May 28 that MicroSafe Care Australia received approval for its patented and trademarked Nanocyn® Disinfectant & Sanitizer. How does this apply to SNOA stock? The sanitizer is manufactured by Sonoma using its patented Microcyn® Technology. It will be entered into the Australian Register of Therapeutic Goods for use against SARS-CoV-2 (COVID-19).
Why’s this important? According to the company, claims that a disinfectant has a virucidal effect must be expressly permitted by the Australian Therapeutic Goods Administration before being used in consumer advertising (including on the label) in Australia.
“As the pandemic has spread around the world, we are excited to work with partners like MicroSafe Group to provide a safer environment for people during this difficult time. As an international company selling products in 53 countries around the world, we are continuously seeking additional partners to expand our domestic and global reach in distributing our products,” said Amy Trombly, CEO of Sonoma Pharmaceuticals. This news propelled the stock to over $16 a share on May 29th during the early morning. Since SNOA is another low float stock, will it react the same as ABIO?