Finding penny stocks to watch is almost laughable these days. In all my years of trading, I’ve never seen opportunities as plentiful as this.
I’ve been saying this phrase a lot over the last couple of months…
Uncertainty breeds opportunity.
Just when I thought the global market couldn’t be any more uncertain, oil futures went negative.
The coronavirus pandemic has given the shaky oil market a long overdue beating.
Countries have tried to fix the oil market for years. But oil, like most industries, is not immune to a pandemic. Especially when the pandemic results in billions of people sheltering at home.
If people aren’t leaving their homes … they aren’t using their cars. If they aren’t driving … they aren’t using oil.
In other words, there’s little demand for oil right now. And basic economics tells us that when demand is low, prices will drop … And wow, did they drop.
With oil prices so low, oil companies got crushed. Many of them dropped over 90% in only two months. But don’t try to catch a falling knife. Have patience with trading these stocks. Only strike when the time is right.
This month, I’ve hunted down my top penny stocks to watch that are positioned to rebound strong during the coronavirus pandemic.
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/or why I’m watching the stock. The watchlist then goes out to my students on Profit.ly.
Before I get to the list of top penny stocks to watch in May 2020…
Table of Contents
- 1 How to Use This Penny Stocks to Watch List
- 2 Top 5 Penny Stocks to Watch May 2020
- 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 (May 2020 Watchlist)
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.
That said, let’s get on with…
Top 5 Penny Stocks to Watch May 2020
Before you read the list of penny stocks to watch in May…
[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.]
Now for the list of top penny stocks to watch in May 2020.
Inovio Pharmaceuticals, Inc. (NASDAQ: INO)
Inovio Pharmaceuticals is a U.S. biotech that develops DNA-based therapies and vaccines. DNA-based therapies are designed to stimulate a precise immune response. The company is also developing a smart delivery system for its treatments.
INO spiked from the $3s to the $19s in March after announcing an accelerated timeline for a coronavirus vaccine. It also received a $5 million grant from the Bill and Melinda Gates Foundation. The grant funds development and testing of the CELLECTRA® 3PSP smart delivery device.
Check out the INO three-month chart:
Inovio has two vaccine candidates for the coronavirus at different clinical trial stages. INO was up after hours on April 28 on positive Phase 1/2a data for one of its SARS-CoV-2 vaccine candidates.
Technically, INO isn’t a penny stock and hasn’t been since its early March spike. But I watch former runners — especially those I’ve traded. INO went on a multi-day uptrend from the middle of April. Ideally, I’d like to see a big morning panic to buy into. Or positive news about a vaccine with big volume. Right now INO is a little high priced for my taste.
Bioscience Neutraceuticals, Inc. (OTCPK: DEVV)
Formerly known as JobLocationMap, Inc., Bioscience Neutraceuticals is a shell company. It’s a subsidiary of Peak Global Holdings Limited. The parent company claims to supply sporting goods and equipment. Bioscience Neutraceuticals claims to sell rebranded essential oils.
Sound sketchy? Welcome to the world of penny stocks.
In the old days, I would have called this a pump. That’s because I read the promotional email. And the disclaimer. The email came from a marketing company compensated $10,000 to promote the stock.
Those were heady days. Now, my lawyer says I can’t call it a pump without absolute proof. So I’m not calling it a pump. Instead, I’ll show you the screenshots and let you decide.
First, here’s the one-month chart:
DEVV wasn’t on my watch list until my Trading Challenge webinar on April 29 when a student alerted me. As you can see from the chart, it looks too perfect. Day after day of steady upward movement. Stocks don’t really move like that without…
I’ll let you fill in the blank. Here’s a screenshot of part of the email:
Sounds sketchy, right? And that’s part of one promotional email. Based on the chart, I’d bet there were more. But it’s only an educated guess based on over two decades as a trader.
Here’s the disclaimer attached to the bottom of the email. I’ve highlighted the fun parts.
Back in the day, I’d short DEVV. But I rarely short these days so it’s not a trade for me. But I do think you can watch and learn.
CytoDyn Inc (OTCQB: CYDY)
CytoDyn is back on the list of penny stocks to watch again in May. It’s a late-stage biotech company with two drugs in the pipeline for the treatment of COVID-19. The top candidate Vyrologix (aka leronlimab) has shown promise in clinical trials.
Take a look at the CYDY three-month chart:
On last month’s watchlist, I mentioned my favorite play on OTC stocks is dip buying morning panics. After a conference call on April 27, CYDY spiked and closed strong. I caught the classic morning panic on April 28 for a $692 win.**
[**My results are not typical. I have exceptional knowledge and skills developed over time. 90% of traders lose money and trading is risky. Never risk more than you can afford.]
Here’s the CYDY five-day chart. (Notice the morning panic on April 28.)
CytoDyn has another conference call scheduled for May 1. The company will update investors about the ongoing COVID-19 trials involving leronlimab. Again, I’ll watch for any big morning panic or morning spike with news and big volume.
Whiting Petroleum Corporation (NYSE: WLL)
Whiting Petroleum is one of the oil companies that got crushed in the oil crash. The company engages in the acquisition, exploration, development, and production of crude oil and natural gas in the Rocky Mountains of the U.S. Then Whiting sells its processed oil and gas to end-users, marketers, and other purchasers.
The collapse of the oil market has made it difficult for Whiting to maintain a profit. A barrel of oil sold for over $50 in January 2020 and is now worth $12. The thin margins evaporated overnight.
Following the price of crude oil, Whiting’s stock price dropped from a high of $8.70 to a low of 25 cents. With little options, Whiting was forced to file bankruptcy on April 1.
Bankruptcy isn’t necessarily a bad thing for a company. It can be an opportunity to reorganize, and many companies return stronger than ever following a bankruptcy.
Whiting’s bankruptcy settlement gives a 97% stake to its debt holders while existing equity holders will hold 3% of the new company. Honestly, I don’t care about this news.
I’m not an investor in WLL, nor will I ever be. The stock’s a trading vehicle for me.
Bankruptcy stocks can provide great volatility, and I’m just trying to take advantage of the predictable spike. Since WLL already had a large two-day run, I’m watching it for a multi-day breakout.
Remember, the stock has fallen over 90% from its highs. So it has room to run, but…
Keep things in perspective. The stock is also up from 25 cents. There’s no guarantee WLL will run again. If it does, I’ll be prepared.
Oasis Petroleum Inc. (NASDAQ: OAS)
Oasis is in the same sector as Whiting — oil.
Guess what Oasis’s stock price has done in the last three months? Collapsed.
What’s happening to oil is what happens to penny stocks every January. Companies get beaten down as investors bail on their positions. Often, the companies get beaten down too far, resulting in a huge bounce.
OAS started 2020 strong, hitting a high of $3.65 on January 7 before collapsing all the way down to 24 cents.
The coronavirus pandemic is threatening to wipe out Oasis … along with the rest of the oil industry. Company execs haven’t released any news or updates about the company since the outbreak. However, on May 5, 2020, the company’s expected to report earnings.
I won’t be holding through earnings, but I’m interested to see if its earnings announcement will create a ‘buy the rumor, sell the news’ situation. Or if the earnings are good, OAS could see a secondary spike. That would get me interested in a possible multi-day breakout.
Watch this video to see how I trade breakouts:
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 (May 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 May 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 these penny stocks to watch in May 2020? Comment below — I love to hear from all my readers.