Wow. It’s already time for my top penny stocks to watch September 2019 edition.
Before I get to this month’s watchlist, I want to cover a very important idea. I see a lot of people trying to force trades when there are no great setups…
You don’t have to trade every day. Learn to be patient and wait for the big percent gainers.
When you force trades, it’s too easy to lose confidence, waste time, and lose money. So when there aren’t any good setups, use the time to study the past. If you trust me on this, you can save yourself a lot of frustration.
Also, when the two largest world economies are fighting each other in a trade war, you never know what’s gonna happen. One tweet could change everything. More on that in the “Broader Market” section below.
Table of Contents
- 1 How to Create a Penny Stock Watchlist
- 2 The Broader Market
- 3 Recap: August 2019 Top Penny Stocks to Watch
- 4 Top Penny Stocks to Watch September 2019
How to Create a Penny Stock Watchlist
Write this down on a sticky note and put it next to your monitor: focus on big percent gainers. That’s where I always start. Use StocksToTrade. I use it every day and recommend that everyone use it, including you. The built-in scans are designed to find exactly the kind of stocks I like to trade.
After I find the big percent gainers, I check trading volume, look for a news catalyst, and always check a longer-term chart. At least a one-year chart, but depending on the stock, I might look further back.
How to Use My Top Penny Stocks to Watch Lists
Below are some key points about using these lists. My goal is for you to become self-sufficient. The sooner you learn to create your own watchlist, the better. Even if you’re not trading yet.
- Use my list as a guide and NOT as a recommendation to trade.
- Develop the skills to become a self-sufficient trader. It takes time. The only shortcut I can give you is … study your ass off.
- NEVER follow my alerts to enter or exit a trade. Use them only to learn my thought process.
- Penny stocks can, and sometimes do, move fast. While this creates opportunity, it also creates risk.
- Learn the patterns I teach but always be willing to adapt to changing markets.
- Join the Trading Challenge for my daily watchlist.
- Do your own research. Try to understand why I’ve put a stock on this watchlist.
The Broader Market
It kills me that we’re in this market where, frankly, you just have to be so careful. With one tweet from our president, one article, or one new piece of news regarding the U.S.-China trade war, the overall market can go up or down 1%, 2%, 3%, and even 4%.
Inverted Yield Curve a Sign of Recession?
On August 14, the yield on 10-year U.S. Treasuries fell below the two-year yield. When long-term yields fall below short-term yields, it’s called an inverted yield curve. It’s considered a sign of potential recession in the near future. An inverted yield curve preceded each of the last seven U.S. recessions.
Federal Reserve Economic Symposium 2019
All eyes were on the annual Federal Reserve meeting in Jackson Hole, Wyoming, August 22–24. On August 23, Federal Reserve chair Jerome Powell made his first public comments since the Fed’s rate cut on July 31.
Powell’s comments on August 23 signaled the Fed’s intention to provide stimulus if necessary. Any action will be based on their existing framework — using unemployment and real interest as a guide for monetary policy.
In his speech, Powell said, “Fitting trade policy uncertainty into this framework is a new challenge. Setting trade policy is the business of Congress and the Administration, not the Fed. Our assignment is to use monetary policy to foster our statutory goals.”
Trade War Update
On August 23, China announced plans to impose tariffs on an additional $75 billion worth of U.S. products in retaliation for U.S. tariffs on $300 billion of Chinese goods.
The new round of Chinese tariffs goes into effect in two phases matching the dates of new U.S. tariffs. The first phase of new tariffs went into effect on September 1. The second phase goes into effect on September 15. Also, on December 15, China will reinstate 25% tariffs on U.S. automobiles.
The Twitter Uncertainty Factor
President Trump then went on a tweet tirade with remarks about the Fed chair Powell and Chairman Xi Jinping of China.
Things really heated up after a multi-tweet rant about the trade war. The gist of the tweets? ‘We’re the U.S. We don’t need China, and we’d be better off without them.’
That’s not exactly true from an economic standpoint … He also ordered American companies to start looking for an alternative to China.
As you can imagine, the markets reacted negatively. Check out the chart below. It’s not difficult to spot where President Trump’s tweets happened…
The problem with the current situation — world leaders using Twitter and the trade war with China — is it can cause a lot of risk. There are different mindsets … Some say it’s good, others say it’s bad. But nobody can debate that it’s very dangerous.
I think this is just one of those times when you need to be especially careful in the markets. Sometimes you just have to say, “You know what? I don’t need any trades right now. I don’t need the risk, frustration, or guessing games … It’s just not worth it.”
Remember, sometimes the best trade is no trade.
Now for some penny stocks…
Recap: August 2019 Top Penny Stocks to Watch
Every month I give a brief recap of my top penny stocks to watch from the previous month. This is what happened with stocks on the August watch list…
- Discovery Gold Corp (OTCPK: DCGD) ran 40.6% between August 1 and August 8 when it reached a high of 92 cents a share. The stock then dropped as low as 34 cents a share before grinding back up. At the time of writing, it’s trading in the mid-80 cent range. DCGD is still on my watchlist, but I need to see big volume, good news, and/or better price action before I consider trading it.
- Northern Dynasty Minerals Ltd. (AMEX: NAK) took advantage of its big spike on EPA news by completing a shelf offering. The company raised roughly $11.5 million in the deal with a plan to use the cash for operating expenses. Shares dropped close to the offering price of 75 cents per share, and it continues to trade in the mid-60 cent range.
- Research Frontiers Incorporated (NASDAQ: REFR) continued its upward trend on news of a big contract with Brazilian armored car outfitter SER Company. The stock hit a 52-week high of $5.38 per share on August 19. At the end of August it was consolidating in the mid $4s.
- Veritas Farms, Inc. (OTCQB: VFRM) is trading in the low $1.30s after reaching a high of $2.29 on August 5. Positive earnings reported on August 15 kept the stock trading sideways most of the month. It hit a month low of $1.05 on August 27 before bouncing back to the $1.30s. It looks like it’s in a consolidation phase.
- Valuesetters, Inc. (OTCPK: VSTR) managed to hold most of its gains from the early August spike. As I said in last month’s update, this one is ultra-low price. It would take massive volume and news for a potential trade.
Here are a few of the stocks I’m watching now…
Top Penny Stocks to Watch September 2019
I find it incredible that so many people hate penny stocks. Even with all the uncertainty surrounding the trade war, our often-hated niche can produce some of the best plays in the entire market for traders like me.
Ironically, on the same day as Chinese tariff announcements and President Trump’s Twitter rant, one of the best stocks in the entire market was a Chinese stock…
Fuwei Films (Holdings) Co. (NASDAQ: FFHL)
Fuwei Films Co. is a Chinese manufacturer and distributor of BoPET film. The company’s products are used in a variety of industries including electrical, imaging, and consumer-based packaging.
FFHL spiked 194% in one day on positive second-quarter earnings.
Take a look at the one-year FFHL chart:
FFHL is a low float stock. On August 23 — the day of its initial spike — the float rotated over seven times. Recently, some earnings winners are multi-day runners, so I’m watching this as a potential buy. If it gets overextended, I won’t chase. But I will look for a potential dip buy into a big morning panic.
Arcadia Biosciences, Inc. (NASDAQ: RKDA)
Arcadia Biosciences, Inc., develops ‘health and nutrition ingredient traits’ for increased agricultural productivity. Some examples of the ag science they’re developing are water-use efficiency, drought tolerance, nitrogen-use efficiency, and so on.
RKDA spiked premarket on August 9 after its subsidiary Verdaca received USDA approval for a drought-tolerant soybean. Then, in a newbie-crushing short squeeze, the stock continued to run — reaching $8.85 after hours on August 13.
Just as it seemed the shorts finally got their way on August 14, Arcadia announced positive earnings and the stock not only held but hit a new multi-month high.
Take a look at the RKDA one-year chart:
On August 26, Arcadia spiked again on news of an exclusivity deal with Arista Cereal Technologies and Bay State Milling Company in key wheat markets, including the U.S.
Arcadia announced a management-succession plan and filed a new prospectus with the SEC on August 28.
RKDA appears to be consolidating in the mid to high $7s so my main focus is potential dip-buys, preferably into a big morning panic.
Workhorse Group Inc. (NASDAQ: WKHS)
Workhorse Group develops and manufactures high-spec electric vehicles for commercial use.
Back in May, WKHS spiked on a tweet from President Trump announcing ‘great news for Ohio’ as the company negotiated the purchase of GM’s Lordstown, Ohio plant. The deal, which at the time was only in the negotiation stages, was far from a sure thing.
The deal still isn’t final. GM spokesman Jim Cain says a search for financing won’t begin until the completion of due diligence. Also, it turns out Workhorse is set to be an investor in the new plant rather than the owner. They would then license technology to the new venture run by Workhorse’s founder and former CEO.
WKHS has seen several multi-day runs since May. The most recent came after an announcement to begin production of 1,100 NGEN electric step vans in the fourth quarter of 2019. Most of the production run is part of a deal recently inked with United Parcel Service (NYSE: UPS).
Here’s the one-year WKHS chart:
WKHS is only a potential buy for me on big volume and good news. But it’s worth watching because of the current market environment. Our president’s ‘America first’ sentiment and the move toward electric vehicles could keep WKHS on the radar for a while. Keep an eye out for tweets…
Vivus, Inc. (NASDAQ: VVUS)
Vivus, Inc., is a U.S.-based biopharmaceutical company that develops ‘next-generation therapies to address unmet medical needs in human health.’ The company has several commercial products on the market, including QsymiaⓇ — a weight-management drug used in conjunction with other therapies.
VVUS has a history of multi-day runs. Recently, the stock spiked on positive news from a pilot study combining QsymiaⓇ with gastric sleeve surgery.
Here’s the two-year VVUS chart:
I traded VVUS for a nice gain on August 20, the day of its recent spike. You can read more about that trade in this recent edition of the Millionaire Mentor Update. As you can see from the chart above, that was also the stock’s highest trading volume in over a year. So to trade VVUS again, I’d ideally like to see big volume and/or news.
Now, for the last of our top penny stocks to watch in September 2019…
Natural Shrimp Incorporated (OTCQB: SHMP)
Natural Shrimp is an indoor gourmet shrimp-farming company. In February, the stock went full supernova after this news touting eco-friendly methods.
SHMP was the hottest stock in the market for several days. I traded it three or four times during the run, including my biggest dollar winner of 2019 on February 12. That morning panic dip buy was worth more than $4K to my account.*[My results are not typical. I’ve studied and traded for years to develop exceptional skills. Trading is risky. Never risk more than you’re willing to lose.]
The supernova was a near 900% spike in seven trading days! Gotta love penny stocks…
This one-year SHMP chart shows the full picture:
Recently, SHMP spiked on news of an $11 million equity line of credit and release of a company video. While the stock’s been teasing big potential moves, it likely needs more volume and news to really spike. Watch it closely!
Check out the one-month SHMP chart:
That’s it for top penny stocks to watch in September 2019.
How to Use Top Penny Stocks to Watch September 2019 Update
Your goal is to become a self-sufficient trader. Use this list — and all my watchlists — as a tool for your education. Study the charts, research the reasons behind big price movements, and watch the stocks trade. Also, check out this post on creating watchlists.
Whatever you do, be safe over the coming weeks and months. It’s difficult to predict the markets at the best of times … But with the trade war playing out on social media and in the news, it’s nearly impossible. Trade with smaller position sizes and be even more focused on risk management.
Are you a trader? How does the current market affect your trading and watchlist criteria? New to trading? What have you learned in this post that you can use today? Comment below — I love to hear from all my readers!