Biotech Penny Stocks to Watch: Key Takeaways
- Biotechs are one of the hottest sectors year after year…
- But the potential reward comes with risk — every biotech spiker is a threat to dilute!
- Don’t hold these stocks, but keep them on watch…
Biotech stocks have had one of the best runs in the two decades I’ve been trading them. Now that the industry has cooled down, I’m getting back to basics. That means a return to my favorite pattern — the panic dip buy.
Table of Contents
- 1 What Are Biotech Penny Stocks?
- 2 Is It a Wise Decision to Invest in Biotech Penny Stocks?
- 3 Top Biotech Penny Stocks to Watch
- 3.1 Biotech Penny Stock to Watch #1: Safety Shot Inc (NASDAQ: SHOT) — The Potential Short if You Like Pain and Stress Dip Buy Biotech Stock
- 3.2 Biotech Penny Stock to Watch #2: Atara Biotherapeutics Inc (NASDAQ: ATRA) — The “Ugly” Biotech Weekend Winner
- 3.3 Biotech Penny Stock to Watch #3: Cardio Diagnostics Holdings Inc (NASDAQ: CDIO) — The Biotech Spiker With Strong FEMY Vibes
- 3.4 Biotech Penny Stock to Watch #4: RedHill Biopharma Ltd (NASDAQ: RDHL) — The FDA News Biotech Stock
- 3.5 Biotech Penny Stock to Watch #5: Scisparc Ltd (NASDAQ: SPRC) — The Multiday Biotech Runner With Merger News
- 4 What Is the Best Biotech Stock To Buy Right Now?
- 5 Get the List of Penny Stocks I’m Watching Delivered to Your Inbox
- 6 Things You Need to Know Before Investing in Biotech Penny Stocks
- 7 How To Trade Biotech Penny Stocks The Right Way
- 8 Biotech Penny Stocks: The Bottom Line
- 9 Biotech Penny Stock FAQs
What Are Biotech Penny Stocks?
Biotech penny stocks refer to shares of small biotech companies that trade for less than $5 — stocks in pharmaceutical companies with drugs in development. Recent biotech spikers have come from the following areas:
- Companies working on COVID-19 vaccines and tests
- Companies working in pandemic relief and control
- Firms researching cancer medicines and immuno-oncology drugs
- Companies developing medicines for rare disorders
These companies are usually desperate for cash from investors. They need it to send their products through multiple phases of testing and stages of trials.
That’s their focus in the markets — to keep stock prices high by selling their progress. When their share prices grow enough, they’ll dilute to cash in, leaving bag holders with big losses…
They’re known to be extremely volatile. One minute they’re flying high on positive headlines — the next they’re down due to bad trial results, side effects on patients, FDA approval issues, or stock dilution.
That’s why I ride the hype but never believe it.
Penny stocks are some of the sketchiest stocks in the market. They suck in newbies with their upside, and these newbies start to believe as share value increases…
There are ways to profit off biotech stocks — as long as you know how the niche works. I learned by making my own mistakes.
I started trading in high school. By the time I graduated college, I had grown my small account from $12,415 to roughly $2 million. I also made some world-class blunders. Read all about it in my best-selling no-cost book, “An American Hedge Fund.”
Challenge students get access to all my top tips and trading education resources — including my daily watchlists.
To become a self-sufficient trader, you have to learn how to build your own watchlist. So study up and learn the logic behind my stock picks…
Is It a Wise Decision to Invest in Biotech Penny Stocks?
These stocks are high-risk, high-reward plays in the biotech industry, offering potential for significant gains but also carrying substantial risk. In this article, we’ll delve into the pros and cons of investing in biotech penny stocks, the factors to consider, and why some biotech penny stocks might be better picks than others.
While the focus here is on biotech stocks, you might be wondering if penny stocks can be a long-term investment. The answer is nuanced. While they’re generally considered short-term plays, there are exceptions. Want to know more about how to approach penny stocks for the long haul? Here’s a guide that delves into long-term strategies with penny stocks.
Top Biotech Penny Stocks to Watch
My biotech stock picks for December 2023 are:
- NASDAQ: SHOT — Safety Shot Inc — The Potential Short if You Like Pain and Stress Dip Buy Biotech Stock
- NASDAQ: ATRA — Atara Biotherapeutics Inc — The “Ugly” Biotech Weekend Winner
- NASDAQ: CDIO — Cardio Diagnostics Holdings Inc — The Biotech Spiker With Strong FEMY Vibes
- NASDAQ: RDHL — RedHill Biopharma Ltd — The FDA News Biotech Stock
- NASDAQ: SPRC — Scisparc Ltd — The Multiday Biotech Runner With Merger News
Disclaimer: This is a watchlist, not a forecast. There’s no guarantee these stocks will offer a trading opportunity or help you hit your trading targets. Keep them on your watchlist, but only trade when you see YOUR best setup.
When there are no truly great trades, use your time to study.
- New to penny stocks? Start with my FREE online guide here.
- Learn how to build your own stock watchlist here.
- Brush up on your pattern knowledge here.
Now, let’s get to the top biotech penny stocks to watch this month.
Biotech Penny Stock to Watch #1: Safety Shot Inc (NASDAQ: SHOT) — The Potential Short if You Like Pain and Stress Dip Buy Biotech Stock
My first biotech penny stock pick is Safety Shot Inc (NASDAQ: SHOT).
I’ve been in the market over two decades. And the hottest stocks continue to follow the same pattern.
It’s called the 7-step framework.
Right now I’m looking for a #5 pattern. Let me explain …
The stock spiked 490% and reached $7.50 in November. But that kind of bullish volatility is unsustainable.
That’s why we saw the price pull back violently on November 22.
Short sellers love these kinds of opportunities. A crap stock that’s spiking unsustainably is bound to crash down. But it’s not that simple …
SHOT is a small-cap stock. The liquidity is low and that makes the price movements highly volatile.
As a result, if there are too many short sellers in a stock, any bullish momentum could cause some to panic and get out. They have to buy to cover and that adds to the bullish momentum.
For short sellers … The situation gets scary pretty quickly.
That’s why I focus on long-biased patterns.
The #5 pattern allows me to target bullish momentum even while the price is falling. I’m talking about a price bounce.
When volatile stocks fall from the highs, we usually see substantial bounces. That’s what I’m most interested in.
We’ve already seen SHOT bounce 70% since the faceplant on November 22. I’ve traded it twice already … My best trade was for a $1,620 profit over the weekend (starting stake $30,320).
Don’t worry, volatile stocks can offer multiple #5 setups. Take a look at this report for an example.
Get ready for more volatility.
Biotech Penny Stock to Watch #2: Atara Biotherapeutics Inc (NASDAQ: ATRA) — The “Ugly” Biotech Weekend Winner
My second biotech penny stock pick is Atara Biotherapeutics Inc (NASDAQ: ATRA).
There are certain nuances about the stock market you need to be aware of. Especially now that we’re nearing December.
The stock market goes through cycles. Some are more predictable than others.
Toward the end of the year, market players are incentivized to sell underperforming positions for a loss so that they can take a break on taxes. Then sometimes they buy the shares back for cheaper to build a new position.
This causes a lot of volatility in December and January.
Get ready for the January effect …
Enjoy the day off, but remember the #StockMarket is open for a 1/2 day tomorrow & after November’s insane performance comes the usual #SantaClaus rally then the January Effect so you better study up & get prepared using new tools like https://t.co/UC6YVfkZpS to truly capitalize! pic.twitter.com/ZczMPs92yz
— Timothy Sykes (@timothysykes) November 24, 2023
First, let’s talk about stocks in December. Stocks that performed poorly all year are subject to drastic selloffs. But there’s also the opportunity for a significant price rebound.
If we can identify oversold stocks with bullish news, we can take advantage of a bullish resurgence.
That’s exactly how I played ATRA.
The stock price was on a lower trajectory since February. And on November 9, prices fell through the floorboards — down 80%.
The night before, the company announced inadequate results for one of the treatments in testing.
But the company’s report mentioned stable cash reserves that would help the business last into 2024.
Prices fell below the $1 Nasdaq listing requirement, signifying a danger of delisting. But this company doesn’t seem to have financial trouble. The price simply overreacted to a negative press release.
I managed to pull $320 from ATRA by holding shares over the weekend (starting stake of $5,525). The company announced the upcoming conference on Tuesday, November 28 and I correctly assumed the hype would build.
Prices are still trading below $1 per share. This momentum could continue to build.
Biotech Penny Stock to Watch #3: Cardio Diagnostics Holdings Inc (NASDAQ: CDIO) — The Biotech Spiker With Strong FEMY Vibes
My third biotech penny stock pick is Cardio Diagnostics Holdings Inc (NASDAQ: CDIO).
I find the hottest stocks by following key factors.
We’ll cover three of them while I explain the upcoming opportunity on CDIO …
- Past spikers.
- Hot sectors.
- Low float.
Past spikers can spike again.
In February and March, CDIO spiked 250% and 680% respectively. In November, the price already launched 900%.
We can’t predict when a stock will spike. But if there’s a history of spiking, our trade conviction is stronger.
CDIO is in a hot sector.
Biotech stocks have been hot ALL YEAR. Hence this watchlist.
For example, CDIO reminds me of Femasys Inc. (NASDAQ: FEMY). A stock that spiked 1,400% between September and October.
CDIO’s most recent spike started on October 31 after the company announced a new contract for its AI heart disease tests … It’s in the biotech sector AND the AI sector.
Last but not least, the low float.
A stock’s float shows the number of shares available. A low supply of shares helps the price spike higher when demand increases.
We aim for a float below 10 million shares. CDIO has 11.1 million shares. Close enough, this is an inexact science.
CDIO has a lot going for it.
But these moves don’t last forever.
Get in and out once you recognize key price action.
The patterns we use depend on the current chart.
Avoid any latency issues: Join our next trading livestream where we cover the hottest setups.
There are opportunities to profit right at our fingertips!
Biotech Penny Stock to Watch #4: RedHill Biopharma Ltd (NASDAQ: RDHL) — The FDA News Biotech Stock
My fourth biotech penny stock pick is RedHill Biopharma Ltd (NASDAQ: RDHL).
After the long weekend from Thanksgiving and Black Friday, I knew Monday, November 27 was going to be wild.
When stocks have extra time to wind up and build hype, the spikes are usually bigger. That’s another reason the holiday season is so volatile.
On Monday RDHL announced an FDA grant for a 5-year market exclusivity of its treatment, Talicia.
The float is only 8 million shares, and prices spiked 240%.
FDA grants are HUGE for biotech stocks.
The FDA is the supreme law of the land when it comes to food and drug availability in the U.S. market. If a tiny penny stock receives recognition from an organization that large, that’s a significant catalyst.
Monday was just day one.
These plays can continue for days and weeks. Keep this one on watch.
Biotech Penny Stock to Watch #5: Scisparc Ltd (NASDAQ: SPRC) — The Multiday Biotech Runner With Merger News
My fifth biotech penny stock pick is Scisparc Ltd (NASDAQ: SPRC).
This stock started spiking on November 15 after the company announced positive data for its treatment of Alzheimer’s agitation.
The chart popped 70% and then continued to consolidate for a few days.
Then, on November 22 the company announced its intent to merge with a vehicle importer company in Israel. That’s important for two reasons …
- Mergers will theoretically always increase the value of a company. Any two companies combined should be more valuable than either alone.
- The war in the Middle East is still at the forefront of national news. Any stock in Israel could be subject to volatility.
Since the merger announcement, the spike that started on November 15 surged past 220%.
And my stock software shows there are only 279k shares in the float. The low share supply helps build a case that this stock could surge even higher.
I’m ready for more volatility.
What Is the Best Biotech Stock To Buy Right Now?
I can’t tell you the “best” biotech stock to buy right now because the market is always changing. What I can tell you is to look at factors like market cap, liquidity, and EPS (earnings per share). These are crucial indicators that can give you an edge. I’ve been trading for years, and I can tell you that understanding these metrics is a game-changer.
You can get your intel from TipRanks links and Wall Street analysts — but remember, they’re not always right. You’ve got to do your own research. Dive into the company’s pipeline, check out their science, and maybe even look into the careers of the top executives. The more you know, the better your strategy will be.
Why Other Biotech Penny Stocks Were Not Chosen
When it comes to biotech penny stocks, not all are created equal. Some have strong growth potential backed by innovative therapies and treatments for diseases, while others might just be riding the hype. It’s crucial to conduct thorough analysis before diving in. Let’s explore why some biotech penny stocks might not make the cut.
- Clinical Indications and Approvals: Biotech companies often focus on specific clinical indications. If a company doesn’t have any therapies or treatments that have received approvals or shown promise in clinical trials, it’s a red flag. Regulatory approvals are milestones that can significantly impact a biotech company’s stock price.
- Financial Health: Revenue and Debt: Another critical factor is the company’s financial health. A biotech company with high debt and low revenue is a risky investment. Always check the balance sheet. Brokers and analysts often provide this information, but it’s best to do your own due diligence. Look at rates of revenue growth and how the company manages its debt.
Get the List of Penny Stocks I’m Watching Delivered to Your Inbox
Want to know the top stocks I’m watching each week? I’ve got a watchlist for that. I’ll send my top penny stocks to watch right to your inbox every week. It can help you learn the process I follow for every stock.
Remember: the stocks in my newsletters aren’t automatic buys. You should only listen to your own opinions. Do your own due diligence and research before considering a stock for your trading portfolio.
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How do I find the hottest stocks to trade? I use StocksToTrade every day. It has awesome charts, built-in scanner tools, social media feeds, and a range of other helpful features to help you crunch data and do your research.
Its Breaking News Chat feature is a game-changer — it helped me make over $1 million in trading profits in 2021, when biotech news was behind many of the best spikers I’ve seen in my 20+ years trading. I seriously think every trader should have this tool working for them. It’s one of the best trading platforms out there.
Things You Need to Know Before Investing in Biotech Penny Stocks
Thanks to their volatility, biotechs can drain your investments faster than you can enter the ticker name in the order window. Banks and traditional finance institutions often steer clear of these for a reason. But if you’re like me, you see the potential for massive gains. I’ve been teaching trading strategies for years, and one thing I always emphasize is risk management.
Before you even think about diving in, understand the economy you’re playing in. Look at dividends, if any, and how the company is positioned in its region. Check out exchanges where the stock is listed; some are more reputable than others. And for heaven’s sake, don’t put all your eggs in one basket. Diversification is key.
If you’re already committed to doing your homework, why not take it a step further? There are biotech companies out there that are just waiting to be discovered. These hot biotechs could be the next big thing, and your research could lead you right to them. Interested in finding these hidden gems? Check out this list of former runners. And remember…
Former runners can run again!
How To Trade Biotech Penny Stocks The Right Way
So you’re still with me? Good. Hopefully, the Instagram trading influencers have already clicked off to go blow up their accounts. Trading biotech penny stocks the right way involves a well-thought-out strategy. I’ve been in this game long enough to know that you can’t rely on luck. You need a solid plan, and you need to stick to it.
First off, don’t ignore the news and events surrounding the biotech sector. This industry is heavily influenced by views from the scientific community, FDA approvals, and other significant events. Keep an eye on these, and you’ll be ahead of the game. Also, consider using credit cards wisely to manage your liquidity, but be cautious of the risks involved.
How do you get ahead of the game? That’s all about finding a biotech penny stock before it makes headlines. It’s possible, but it requires a specific approach. Learn my secret formula for finding penny stocks pre-spike here.
Biotech Penny Stocks: The Bottom Line
Biotech penny stocks are some of the sketchiest stocks in the market. They can have huge price swings on positive or negative news. But if you’re prepared to take advantage of the volatility, these stocks can offer great trading opportunities…
I teach students how to take advantage of volatile penny stock moves — and all the other things — in my Trading Challenge.
It’s where all my millionaire students refined their approaches. My students get access to all my top trading education resources — my DVDs, thousands of video lessons, and weekly live trading and Q&A webinars.
But I don’t accept everyone for these programs. Here’s something you should know about me…
If you're lazy, I beg you to unfollow me & spare me from wasting a second of my precious life own your useless ass. Sorry to be harsh, but life is short and lazy people & I do not get along. Go make your excuses & whine about your issues to someone who has compassion for I do not
— Timothy Sykes (@timothysykes) February 6, 2022
I only want the most dedicated students. Are you ready for the Challenge? Apply today.
What are your top biotech penny stocks to watch? Let me know in the comments … I love hearing from my readers!
Biotech Penny Stock FAQs
What Biotech Sectors Should I Focus On?
When it comes to biotechnology, you’ve got a smorgasbord of options. Genomics and cell therapies are hot right now. Don’t overlook stem cells; they’re a cornerstone in healthcare solutions. Diversifying across these sectors can be a smart move.
What Investment Vehicles Are Suitable for Biotech Penny Stocks?
You’ll hear me say it a million times: diversification is key. Consider ETFs that focus on biotech. If you’re into individual stocks, keep an eye on ipo listings and blue-chip companies that have a biotech arm. Setting a price target can help, and don’t forget, you can also use an ira to hold these assets.
How Do Market Dynamics Affect Biotech Penny Stocks?
Market dynamics are the bread and butter of trading. Keep an eye on buyers and their positions, especially in penny shares and penny stocks. Pharmaceutical stock can be volatile, so understanding the market sentiment is crucial.
How Can I Analyze Biotech Penny Stocks?
We’re here for the long haul, so get familiar with the tools of the trade. A stock biotech chart is invaluable for technical analysis. Keep a stocks list for quick reference, and don’t forget to compare pharma stocks to get a broader view.
What Additional Factors Should I Consider?
You don’t have to mirror my techniques, but you should watch the stock charts of former runners like Nymox Pharmaceutical Corp (OTCPK: NYMXF), Ardelyx, Inc. (NASDAQ: ARDX), and Rigel Pharmaceuticals, Inc. (NASDAQ: RIGL). Articles and technology updates can provide valuable insights. Sales figures, types of services offered, and partnerships can also be indicators of a stock’s potential. Exercise caution and listen to the response from scientists in the field to make an informed decision.