Before you dig into the Top Penny Stocks to Watch August 2019…
‘Hot stock picks’ will never help you learn to trade. Be wary of anyone who says, “Buy, buy, buy … sell, sell, sell,” like the financial TV pundits. I adapt to the market, and so should you.
Also, remember that penny stocks can move fast, and sometimes they don’t move at all.
- Learn to create your own watchlist. Use my list each month as a guide.
- Develop the skills to become a self-sufficient trader. NEVER follow another trader’s alerts to enter or exit a trade. Including mine. Follow my alerts only to learn my thought process.
- Learn all the patterns I teach. Learn to recognize when they are working and not working. Adapt, adapt, adapt.
- If you want my daily watchlist, join the Trading Challenge. It can help you better understand my thought process. Also, you can see how often I’m wrong. (If I’m wrong I don’t trade the stock. If I’m in a trade and my thesis proves wrong, I get out. Period.)
- Do your own research. Try to understand why I’ve put a stock on this watchlist. Do not consider this list a recommendation to buy a stock.
[Disclosure: Some of the stocks mentioned below have been traded or otherwise discussed by Tim Sykes as part of his daily watchlist provided to Trading Challenge, TimAlerts, Pennystocking Silver, and Millionaire Masters Program subscribers. Tim Sykes may or may not hold open positions on these stocks at any given time. This list is not a recommendation to buy or sell any stock. Do your due diligence. Full earnings claim disclosure here.]
Table of Contents
- 1 The Broader Market
- 2 Recap: July 2019 Top Penny Stocks to Watch
- 3 Top Penny Stocks to Watch August 2019
- 4 How to Use My ‘Top Penny Stocks to Watch, August 2019’ List
The Broader Market
The Dow hit an all-time high of 27,359.16 on July 15. But the trade war with China is in full gear. President Trump announced tariffs on a further $300 billion worth of Chinese imports. China responded by devaluing its currency, the yuan, to make exports more attractive.
As I’ve said before, the trade war creates a level of uncertainty. One positive — or negative — headline could shift market sentiment. That’s the most difficult part of trading while the trade war continues. So whatever you do, be safe.
On July 31, U.S. markets dropped fast on news of a Fed rate cut of 25 basis points. August 1 was one of the most volatile days in several months. After a strong bounce during morning trading hours, President Trump’s tariff announcement hit the news. Markets reacted negatively — and fast. The Dow lost 512 points — roughly 1.9% — in under an hour.
The yuan’s drop against the dollar on August 5 was called currency manipulation by the U.S. Treasury. Whether it was or wasn’t … the Dow closed down another 541 points. That’s roughly 6.4% off its July high. Will Trump’s gambit pay off? In the short term, it’s wreaking havoc on the markets. I’m advising students to be safe.
Penny Stocks Are Sizzling in the Summer Heat
Surprisingly, the last few weeks have been great for trading penny stocks. There have been so many plays. That’s why I like to say, “don’t take a month or even a week off just because it’s summer.”
If you try to plan your life around when you think there’ll be hot plays, you’re gonna miss some.
Instead, be ready for hot plays. Yes, you should remember in the back of your mind that summers are a little slower. But keep in mind that when penny stocks start taking off, there can be a bunch of them.
That doesn’t mean you should overtrade. I see a lot of newbies taking trades just hoping to catch a move. STOP. Wait for the best setups. You’ll miss one or two — or more. But in the long run, it’s better for your account … and your confidence.
It’s time to recap last month’s stocks to watch. Remember from the July update, the first three stocks on the list were going through multi-day, multi-week upward trends.
Recap: July 2019 Top Penny Stocks to Watch
- Digital Turbine, Inc. (NASDAQ: APPS) traded relatively flat for most of July. Since July 22, the stock has been choppy but continues its slow and steady uptrend. It hit a 52-week high of $5.77 on August 1.
- Conformis, Inc. (NASDAQ: CFMS) trended down the entire month of July. On August 1, the stock lost 38% in pre-market trading on soft revenue outlook for the year. As I write, the stock is trading at $1.49. That’s roughly 69% off the 52-week high of $4.83 on June 11.
- Corindus Vascular Robotics Inc. (AMEX: CVRS) ran from $3.46 on June 28, to a six-month high of $8.10 on July 5. Trading volume on July 5 was the highest since April 2017. Then it went through a mid-range consolidation for two weeks before pulling back to $3.91 to end the month.
- Avid Bioservices, Inc. (NASDAQ: CDMO) was a big earnings winner at the end of June. The announcement of two large contracts on July 8 helped the stock hold its gains. It spent most of July consolidating in the $6 to $6.50 range and continues a slow upward trend.
- FuelCell Energy, Inc. (NASDAQ: FCEL) had a three-day run July 1–3 on news of a carbon-capture project. But on July 15, the company warned of bankruptcy unless it could raise more capital. The stock tanked — losing 45% in 24 hours. As I said last month, the long-term chart is terrible. When a cash-burning company combines dilutive financings with reverse stock splits to stay listed … it’s not a good sign. Then there are the executive bonuses…
- Ocular Therapeutix (NASDAQ: OCUL) had an up-and-down month in July. The stock hit a multi-month high of $5.55 on July 15. At the time of writing it’s trading in the $4.70s — right where it started July. It has managed to hold the gains it made in June. Ocular is set to release second-quarter financial results on August 7, 2019.
Top Penny Stocks to Watch August 2019
Quick recap on how stocks make this list: I choose primarily big percent gainers. Then I look for volume and a news catalyst. I also look at longer-term charts for a history of spiking and multi-day runs.
I want to reiterate this list is NOT advice to buy or even trade. That’s why it’s called a watchlist — not a buy list. You have to learn to trade penny stocks when they’re hot but stay away when they’re not. By the time you read this, these stocks might be out of play.
As the overall market tanked on August 5, one of the strongest stocks in the entire market was a penny stock. It’s the first stock on the list.
Let’s do it … here’s my list of penny stocks to watch, August 2019.
Discovery Gold Corp (OTCPK: DCGD)
DCGD sprang to life in 2010 as a mineral exploration company. But it seems to have shifted to the weed sector…
Seattle-based GRN Funds, a hedge-fund run by Justin Costello, recently purchased a 55% controlling position. GRN Funds holds shares in a few CBD companies. They also own a controlling interest in a payment processor for high-risk industries. Like weed.
The company recently appointed two new members to its strategic advisory board. One is weed industry consultant Dr. Jeffrey Sharkey. The other, retired sales executive Peter Juvet. The company also announced a corporate name change to GRN Holding Corporation. A website is under construction.
Green Is the New Gold
So, it looks like they used to be in gold, and now that Costello’s in charge, they’ve moved on to smokable gold. What does the company do? Aside from the CEO smoking $10,000 ‘cannagar’ blunts, that is…
The current description says it’s “a publicly quoted shell company seeking to merge with another entity with experienced management for growth in return for shares of common stock.” In other words … the company has no products, no services, and no revenue.
Why put DCGD on my watchlist? Again, it’s a big percent gainer with big volume. Admittedly, it’s missing a strong news catalyst. Instead, the ticker has been all over chat rooms touting Costello as an industry expert. One with deep pockets and a plan.
It’s an almost sympathy play as Cannabis Global Inc (OTCPK: MCTC) named Costello to its strategic advisory board on July 18.
Check out the DCGD one-year chart:
I wouldn’t hold my breath on DCGD, and I definitely wouldn’t hold the stock long term. But I’ve had success trading this one intraday. As it’s up so much, I won’t chase. It’s now a potential dip buy into a morning panic only for me.
Below is the DCGD one-month chart with five-minute candlesticks:
On to the next stock…
Northern Dynasty Minerals Ltd. (NYSE American: NAK)
Northern Dynasty Minerals Ltd. is a mineral exploration company with a big gold and copper project in Alaska. The project, called Pebble Beach, was stopped in its tracks by the EPA back in 2014. The regulatory body made a determination to not consider an environmental impact statement (EIS).
On July 30, after a long battle, the EPA withdrew its preemptive determination. Which means although the project doesn’t have the green light, the EIS can at least get done.
That announcement was the catalyst for a 66.7% spike to a multi-month high. Here’s the NAK one-year chart:
Now take a look at the NAK 10-day chart below:
NAK isn’t my ideal setup. First, it’s a commodities-related play. Second, it’s an NYSE American stock — never my favorite. Plus, even though it’s holding gains and consolidating, volume dropped after the spike. I’d have to see big volume and/or news before risking my money.
Now for a higher-priced spiker…
Research Frontiers Incorporated (NASDAQ: REFR)
Research Frontiers Incorporated has a patented technology called SPD-Smart glass. It allows a user to change the tint of a window at the touch of a button. Applications include automotive, aircraft, marine, rail, and architecture.
Take a look at the REFR one-year chart:
As you can see from the chart above, REFR spiked with massive volume on July 29. There was no clear news. Then the stock consolidated for a few days before running again on August 2.
Now look at the REFR 10-day chart with five-minute candlesticks:
On August 5, REFR issued a press release announcing a second-quarter earnings call for August 8, 2019. The stock pulled back but found support in the $3.90 range. Will it be an earnings winner? Time will tell.
… is the CBD/weed sector making a comeback? Check this one out…
Veritas Farms, Inc. (OTCQB: VFRM)
Veritas Farms operates a 140-acre cannabis farm in Pueblo, Colorado. They have several full-spectrum CBD oil-based products.
In June, VFRM spiked 154% in five days on news of a distribution deal placing their products in 1350 Kroger stores. Then it spent roughly a month consolidating.
Take a look at the VFRM one-year chart:
On August 1, Veritas Farms issued a press release to announce their CEO would be a guest on Fox Business Network. Veritas got a sympathy play pop when competitor Charlotte’s Web (OTCQX: CWBHF) announced their own Kroger distribution deal on August 2.
Check out the VFRM one-month chart with five-minute candlesticks:
An August 6 press release gave the stock another boost. It announced social media ‘influencer partnerships’ with a reach of 25 million people. As I write, VFRM is trading sideways and holding the $1.82–$1.88 range.
And now, for the last stock on the list…
Valuesetters, Inc. (OTCPK: VSTR)
VSTR is an ultra-low-priced former runner spiking on positive earnings. Valuesetters runs a one-stop technology consulting, digital marketing, and capital-raising shop.
Why choose such a low-priced stock? Because even when big companies get crushed by the overall market…
… the often-hated penny stock niche is sometimes the best performing niche in the market.
Here’s the one-year chart:
For me to trade this stock, I would need to see big volume and news. It’s up so much for such a low-priced stock, I wouldn’t want to chase.
How to Use My ‘Top Penny Stocks to Watch, August 2019’ List
As always, this list provides insight into recent movers and the news behind the moves. The best way to use this watchlist is to study the charts, do research, and become familiar with the ‘how and why’ of price action.
In other words, there’s no guarantee any of these stocks will still be on the move in the coming weeks.
I suggest you apply for the Trading Challenge if you’re ready to take the next step on your trading journey. It’s hard work. But with the right attitude, you can potentially become a self-sufficient trader.
One final thought: if you’re on the fence about the Trading Challenge…
… come to the Trader & Investor Summit in Orlando, September 20–23, 2019.
What is it?
The Trader & Investor Summit is two full days of learning from me and my top students. Then, on Monday, September 23, you’ll join us for a day of live trading.
There’s no better way to jump-start your trading career. Plus, you’ll get to network with Trading Challenge students from around the world. Join 499 other traders at this once-in-a-lifetime event.
**The Trader & Investor Summit sells out every year. Don’t miss this unique opportunity.**
Are you a trader? How are you choosing stocks to watch during the summer months? If you’re a new trader, what will you take from this post to become a better trader? Comment below, I love to hear from all my students!