Before I get to the top penny stocks to watch for August 2020, I want to emphasize a very important trading lesson.
The market has shifted the past two weeks. I’m getting too many messages from traders who think they’re ‘stuck’ in a trade. The great thing about trading is that YOU are in control. You don’t have to hold long term. Use the volatility to your advantage and take profits along the way.
Focus on big percent gainers and recognizable patterns. You have no idea what a random stock with a random pattern will do. With experience, you’ll be more confident about big percent gainers with recognizable patterns. Remember rule #1: cut losses quickly.
Every day, I create a watchlist of five to 15 stocks to watch. Then I do a quick write-up of what I’m looking for and why I’m watching the stock. The watchlist then goes out to my students on Profit.ly.
Let’s get right to the list of top penny stocks to watch in August 2020…
Table of Contents
- 1 Top 5 Penny Stocks to Watch August 2020
- 2 How to Use This Penny Stocks to Watch List
- 3 Can You Trade Penny Stocks?
- 4 5 Tips on How to Choose the Best Penny Stocks to Watch
- 5 Frequently Asked Questions About Penny Stocks
- 6 Conclusion — Penny Stocks to Watch (August 2020 Watchlist)
Top 5 Penny Stocks to Watch August 2020
Kronos Advanced Techs Inc (OTCPK: KNOS)
Kronos Advanced Techs Inc. manufactures air filters that remove bacteria, viruses, and pollutants. In May, Kronos announced upcoming infomercials starring Shark Tank investor Kevin Harrington. He also agreed to join the advisory board. KNOS traded 96.6 million shares in one day on the news.
On July 24, the company announced acceptance as an online supplier at Walmart.com. It was another great example of penny stock informational inefficiency. The stock gapped up on July 27 and ran from 24 to 45 cents per share in two days.
Check out the KNOS three-month chart:
Zest Technologies, Inc (OTCQB: ZEST)
Zest Technologies, Inc. is an agricultural tech company. It provides supply chain visibility for produce and meat. The tracking system uses a hybrid SaaS platform combined with blockchain technology.
ZEST hasn’t had a news catalyst driving recent price action. Even so, check out the perfect multi-month breakout on the ZEST six-month chart:
ZEST has been trending up nicely but trades very low volume. I took a small overnight position on July 27, selling into the gap up on July 28. Ideally, I need to see big volume and a news catalyst to buy again. I’ll keep watching.
Big 5 Sporting Goods Corporation (NASDAQ: BGFV)
Big 5 is a sporting goods retailer with both brick-and-mortar and e-commerce offerings. The stock spiked on July 9 after announcing preliminary Q2 earnings. BGFV then trended slowly up on investor optimism toward the sporting goods sector.
Sometimes earnings are already priced in by the time a company makes its announcement. BGFV proved different as it spiked from the $4.60s to over $7 per share on its July 28 earnings announcement.
Here’s the BGFV six-month chart:
I’d love to see BGFV continue to run higher with more volume. I won’t chase it. But it’s a potential dip buy into a morning panic. For now, I’ll watch it.
Vystar Corp (OTCQB: VYST)
Vystar Corp has several brands in the rubber and plastics markets. Its RXAir UV-light air purifiers have proven effective at killing airborne pathogens (including coronavirus). VYST spiked in May after announcing it was resuming production of its FDA-certified Rx3000 in the U.S.
Now, since the WHO declared COVID-19 is airborne, there’s a big market for air purifiers.
VYST trended up the second half of July. On July 28, the company issued a press release highlighting the CDC’s concerns about the coming flu season. It also explained how its air purifiers could reduce risk of infection in hospitals.
Check out the VYST six-month chart:
I traded VYST on July 17 and 18, taking advantage of a perfect OTC first green day pattern. Then on July 28, I traded the intraday/multi-week breakout. The stock finished the day near its highs.
I’ll keep watching VYST. If it breaks out over the 52-week high it hit on June 22, it could be a buy. Ideally with volume and more news. Otherwise, it’s a potential dip buy into a morning panic.
Sonoma Pharmaceuticals Inc. (NASDAQ: SNOA)
Sonoma is a specialty pharmaceuticals company with a disinfectant and sanitizer called Nanocyn. In May, SNOA spiked from the $5s to $19.60 in two days when Nanocyn was registered in Australia for use against COVID-19.
On July 28, Sonoma announced Nanocyn passed testing for use on Boeing and Airbus planes.
First, check out the SNOA six-month chart:
Now take a look at the SNOA five-day chart:
Notice the green news icon on the chart. The news was released at 4:05 p.m. Eastern. SNOA spiked to $13.44 in a matter of minutes. This is just one more example of the potential with penny stocks. Especially with the right news catalyst. I’ll keep watching SNOA for now.
That’s it for the top penny stocks to watch for August 2020. Here are some tips on choosing stocks for your watchlist. Also, some answers to frequently asked questions…
How to Use This Penny Stocks to Watch List
Keep in mind that my strategies involve trading some of the fastest moving, most volatile stocks in the entire market. That said, some of the stocks on this list could be completely out of play by the time you read this. (Yes, even after only one day, stocks sometimes leave my list.)
The point is … don’t use this list as a signal to buy any stock. I don’t put stocks on my watchlist based on fundamentals. It’s not that I don’t look at fundamentals. But I’m not gonna lie to you. (Like so many other ‘top penny stocks to watch’ articles.) I won’t tell you to buy and hold a stock because “the market is undervaluing this stock.”
Frankly, that kind of thinking with penny stocks is … total BS. Most penny stocks fail. Just like most traders — roughly 90% — lose. So use this list — and each of my monthly penny stocks to watch lists — as a tool for learning to create your own watchlist.
Can You Trade Penny Stocks?
If you’re brand new to penny stocks a great place to start is with my FREE penny stock guide.
Once you go through the entire guide, I suggest you read “The Complete Penny Stock Course” written by my student Jamil (I wrote the forward). That book answers so many of the most frequently asked questions that it blows my mind more people haven’t read it.
With the internet and online brokers, you can trade penny stocks from anywhere in the world. As far as the basic requirements, you only need a decent laptop, solid Wi-Fi, and a trading account. But don’t be fooled into thinking you’re gonna succeed if you jump right in.
Because 90%+ of traders lose. So be willing to invest in your education — because if you don’t, the market will make you pay a much higher price.
Now for five tips on how to choose the best penny stocks to watch…
5 Tips on How to Choose the Best Penny Stocks to Watch
Tip #1: Look for Big Percent Gainers
My method of choosing which penny stocks to watch always starts here. At the end of every day — and again in premarket — I look for the biggest percent gainers. And that’s what I focus on. I’m not interested in stocks that aren’t on the move.
I use StocksToTrade stock scanning software. With 40+ built-in scans — some created specifically for my strategies — it’s amazing right out of the gate. Yes, you can also create custom scans. (Hint: when you start using the software, there are a bunch of training videos on how to set those up. Take advantage.)
Tip #2: Look for Big Volume
The next thing to look for when choosing the best penny stocks to watch is trading volume. Sometimes stocks gain momentum and spike big even without news. Especially when there’s enough volume.
After I find the big percent gainers, I organize them according to trading volume. Be aware of dollar volume traded, too. If you have a true penny stock trading at 2 cents a share, and it trades one million shares, that’s still only $20K. You have to be meticulous.
Tip #3: Look for a News Catalyst
The next thing I look for when choosing penny stocks to watch is what’s making it move? Is there a press release announcing a new contract? What about positive earnings?
In biotech and pharma penny stocks you might see news of test results. Read this post to learn more about catalysts.
(Also read chapter II.7 Understanding Catalysts in “The Complete Penny Stock Course.” If you already have the book … it starts on page 183. If you don’t have it … get it now.)
Tip #4: Look at the Long-Term Chart
When you’re trying to find the best penny stocks to watch, it’s easy to get fooled by one-day or one-time spikers. So look at long-term charts to see if the stock has a history of multi-day runs or has gone supernova in the past.
Which long-term charts? As many as you have time for, really. But at the very least, look at the one-year chart. I like to look back a couple of years depending on the stock and the news. If the stock trades a certain way when the company announces a big contract, I want to know.
Tip #5: Use the Twitter Scanner on StocksToTrade
It might sound a little strange if you’re new to penny stocks. But if you want to understand which penny stocks to watch, one of the best ways is to see what others are watching. Or, more accurately, hyping.
Yes, Twitter has become a vehicle for influence with stock traders. Want to know which penny stocks are being heavily shorted because they’re up 50%? Check out Twitter. Use StocksToTrade because the scanner is built-in. All you have to do is open the Twitter scanner and, voila, you get a running feed of stock tweets. And you can customize the feed if you like.
Frequently Asked Questions About Penny Stocks
I get a lot of questions from students. Thing is, my students already accept that penny stocks provide a massive opportunity. And they’re studying to learn the strategies and rules.
But there are a lot of misconceptions about penny stocks. And I want to address a few of those now…
What Are Penny Stocks?
Penny stocks are micro- and nano-cap company stocks that trade for less than $5 per share. Many trade via OTCMarkets, but penny stocks can also be found on large exchanges like the NYSE and Nasdaq.
Are Penny Stocks Worth it?
Penny stocks are suitable as trading vehicles but not long-term investments. Most penny stock companies eventually fail.
How to Watch Penny Stocks?
1.) Focus on big percent gainers. 2.) Look for high volume 3.) Search for a news catalyst 4.) Look for a history of spikeability on the long term chart. 5. Use a scanner like StocksToTrade. (StocksToTrade was designed for penny stocks.)
Are Penny Stocks Dangerous?
All trading involves risk. If you are willing to learn appropriate patterns, rules, and strategies, penny stocks are no more dangerous than other trading instruments.
For the uneducated — and stubbornly refusing to get educated — penny stocks can be dangerous. Which is exactly why you have to learn my patterns, rules, and strategies. I trade conservatively with a small account to focus on teaching.
If you’re willing to follow the rules and strategies I teach…
… and you’re willing to trade conservatively with small positions as you learn…
… then penny stocks don’t have to be dangerous. That doesn’t mean you’ll never lose. I lose roughly 25% of the time and my winning percentage is exceptional. But you can be successful with a lower winning percentage. So a better question than whether penny stocks are dangerous is…
… are you willing to put in the time and effort to learn what you need to learn? If so, apply for my Trading Challenge today.
If Most Penny Stock Companies Fail, Why Not Just Short Sell?
Because it’s a very dangerous, overcrowded game right now. The level of risk so many moron newbie short sellers take these days is unconscionable. It’s completely crazy.
Of course, you can be successful as a short-seller. Many of my top students focus on short selling and I’ve personally made millions from short selling. But the number of messages I get almost daily from short-sellers getting caught in short squeezes is … scary.
How Much Money Do I Need to Get Started?
I’m going to say, again, invest in your education first. It doesn’t take a huge amount of money to get started trading. Different brokers have different account minimum requirements. (I use these brokers and avoid offshore brokers altogether.)
But the market will make you pay more if you aren’t prepared. Preparation is key. The stock market is a battlefield, so arm yourself accordingly. Keep in mind that my top students all studied hard over time to get consistently profitable. Tim Grittani — arguably the best penny stock trader in the world — didn’t make anything for nine months.
So before you fund a trading account, fund your knowledge account. If you’re not quite ready for the Trading Challenge, try Pennystocking Silver. It gives you access to more than 6,000 video lessons. (You also get access as a Trading Challenge student, of course.)
Conclusion — Penny Stocks to Watch (August 2020 Watchlist)
Your goal as a trader is to become self-sufficient. And my goal is to be the mentor to you that I never had. So I hope you’ll take this list of the best penny stocks to watch in August 2020 and use it as a learning tool.
👉🏼SUBSCRIBE to my FREE weekly stock watchlist here.
Focus on the process. The best way to learn which penny stocks to watch is to make a daily watchlist yourself. Follow the five tips above. It doesn’t matter if every stock on your list is not perfect. Or doesn’t play out the way you thought. You get better by making your daily watchlist and then seeing what happened during the trading day.
… this list of penny stocks to watch is NOT a recommendation to buy. Also, my results are not typical and I’ve developed exceptional skills over two decades of trading.
What do you think of the top penny stocks to watch in August 2020 watchlist? Comment below, I love to hear from all my readers!