One of the things we frequently see with penny stocks is the “sympathy” trade. This usually involves 1 bellwether stock attracting the interest of day traders. Once that stock becomes “too hot” or reaches levels seen as “too high,” retail traders tend to look for other stocks with similar traits.
This can involve industry-specific trends like when the micro-niche of tech & blockchain stocks, NFTs began grabbing interest. The former penny stock Takung Art (NYSE: TKAT) jumped in March after speculation focused on the company’s potential within the newly developed industry.
That move ignited a multi-week explosion in stocks that had even the slightest exposure to online art or popular entertainment branding. We also saw a sympathy trade in stocks like AMC Entertainment (NYSE: AMC) and GameStop (NYSE: GME). In that case, it wasn’t based on industry excitement but more focused on stocks with high short interest. This sparked a rally in hundreds of short-squeeze stocks & remains a point of interest for retail traders.Technical Trends Place Focus On Penny Stocks
But aside from hot industry stocks or meme stocks, retail traders also focus on technical aspects. This can entail certain average trading volumes, specific share structure figures, and the like. This is where you see things like “low float penny stocks” become a popular topic. Over the last few days, retail traders have been fixated on SGOCO Group Ltd (NASDAQ: SGOC). This was one of the penny stocks we discussed last Thursday after observing a bullish trend in tech stocks. In particular, SGOC experienced some unusual volume and soon found itself on that list of penny stocks to watch.
Fast-forward a few days, and even after Friday’s big 500% surge, SGOC stock continued higher to start the week. All told, this former penny stock has now rallied over 1,100% in just a few days. While there weren’t any major fundamental events that can be seen as catalysts, its relatively dormant nature in the market, along with a lower public float, seems to be the topic of discussion among traders right now.Current & Former Penny Stocks To Watch
- GT Biopharma Inc. (NASDAQ: GTBP)
- Cemtrex Inc. (NASDAQ: CETX)
- Origin Agritech Limited (NASDAQ: SEED)
- Creatd Inc. (NASDAQ: CRTD)
Based on the criteria, GT Biopharma is one of the companies that fall into this group. It trades less than 1 million shares per day and has an outstanding share count of roughly 21 million. While it isn’t currently a penny stock, GTBP shares were only $4 in mid-March. Since then, a mix of market momentum and corporate milestones have helped spark a rally this year. The biotech company focuses on oncology treatments utilizing its TriKE technology platform.
One of the hot topics this year aside from coronavirus is cancer and cancer stocks. In particular, the M&A climate has placed a focus on companies within this niche. In GT Biopharma’s case, its early success in clinical phase trials of its GTB-3550 has drawn interest from retail and institutional investors alike. This treatment is being designed for patients with acute myeloid leukemia and myelodysplastic syndrome.
Initial study results have shown a meaningful response, with 57% of patients experiencing “significant reduction in AML/MDS cancer cell burden” when treated with GTB-3550. There was also up to a 63.7% reduction in bone marrow blast levels in some patients. At all dose levels, the treatment was well-tolerated without any adverse events is something the market is keeping in mind as well.What To Watch With GT Biopharma
However, the bigger story is centered on GT Biopharma’s treatment platform that GTB-3550 and other candidates are based on. The TriKE technology or “tri-specific killer engager” cell treatment platform utilizing “natural killer” or NK cells to target cancer cells. Noto only has the TriKE platform demonstrated performance on its own, but recent data supports its potential in tandem with other drugs. For instance, when GT’s B7H3 TriKE was combined with Fate Therapeutics’ (NASDAQ: FATE) FT538 treatment in prostate cancer, the combination performed far better than FT538 had performed previously:
Keep in mind that Fate is an $8 billion+ company with an $86 stock price tag, and its treatment showed high performance when paired with GT Biopharma’s TriKE platform. Read more on this specific treatment & study of TriKE and NK cell therapy.Cemtrex Inc. (NASDAQ: CETX)
While it is still a penny stock, Cemtrex seems to fall in line with the smaller share structure. If you look at the CETX Stock profile page, you’ll see that it has less than 20 million shares outstanding. What’s more, the average daily volume is usually under 1 million shares. This week kicked things off with CETX trading more than 97 million shares during the first half of the July 12th session. This was a continuation of the momentum that seems to have begun on the 9th.
We discussed the momentum briefly and highlighted that no recent news had been released to suggest a headline catalyst for the move. Needless to say, if you look at how sympathy momentum could have played a role, the latest trend doesn’t seem as unusual, in my opinion.What To Watch With Cemtrex
Tech stocks have gotten a lot of attention over the last few weeks. Now that earnings season is upon us, the sector continues showing strength. Monday, the tech-heavy Nasdaq reached a new record high to start the week. Cemtrex, in particular, is part of the Internet of Things (IoT). It develops artificial intelligence, as well as augmented & virtual reality products.
Something to keep in mind is the growth that the company has experienced. In its last earnings update, the company reported a net income of $2.5 million. This was a big turnaround compared to a net loss of $1.6 million in Q2 2020. In light of potential sympathy sentiment and sector strength, CETX has found its way on a “few” watch lists this month.Origin Agritech Limited (NASDAQ: SEED)
Origin Agritech is another one of the former penny stocks that fits a broad mold of this sympathy trend. SEED stock trades less than 1 million shares per day on average, and if you look at its stock profile page, you’ll see an outstanding share count of roughly 5.7 million. Furthermore, if you look at the stock’s chart, you’ll see an uptick in trading activity that has generally coincided with the volume trend of SGOC over the last few days. However, in Origin’s case, there were also fundamental events to make a note of.What To Watch With Origin Agritech
Origin is a China-based company developing crop seed biotechnology. On July 8th, it announced receipt of approval for 4 of its hybrid corn breeds from the Ministry of Agriculture and Rural Affairs. This news seemed to ignite the original spark the began this wave of bullish momentum in the market for SEED stock.
This week, the company added to its headline catalysts with news of expanding Origin’s GMO trait portfolio. It entered into a rights agreement with the Biology Research Institute of Chinese Academy of Agricultural Science. This exclusive agreement will see Origin obtain global rights to the drought-resistant GMO trait from the Academy. The drought-tolerant corn has been approved for production trials by China’s Ministry of Agriculture and Rural Affairs.Creatd Inc. (NASDAQ: CRTD)
Another one of the companies with a usually lower average daily volume and fewer shares outstanding is Creatd Inc. The company typically has traded less than 1 million shares a day, and the CRTD stock profile page shows fewer than 12 million shares outstanding. What’s more, if you look at the volume trend of the former penny stock and that of SGOC, you’ll likely see some similarities. Volume was light leading up to last Thursday (July 8th). This is when we saw the unusual volume trend begin thanks to attention from retail traders (See: 10 Penny Stocks to Watch That Are Trending on Reddit Right Now). Since then, like SGOC, CRTD stock volume has been well above average.What To Watch With Creatd
Other than that, traders on social media have circulated the stock as one with higher than average short interest. Other than that, there haven’t been any news headlines or filings released in conjunction with the latest market action.
Considering that the potential catalyst could be technical in nature, it’s important to understand the dynamics at play. Lower float, higher short interest stocks can be incredibly volatile. While this latest bout of action has put bulls in control, any stall in this trend could see the opposite. So if CRTD stock is on your list right now, keep this in mind.Penny Stocks To Watch Right Now
Whether penny stocks are trending thanks to news or technical trends, it’s good to understand what potential catalysts might be. In many cases, it can help you develop the right strategy for each trade. With the case of the “short squeeze stocks,” breakouts can happen quickly, with breakdowns coming swiftly behind. On the other hand, fundamental catalysts are important to note because they can leave a lasting impression on certain stocks. Thanks to this latest breakout from stocks like SGOC and others, lower-priced names have found a way into the retail trading spotlight this week.
Pursuant to an agreement between Midam Ventures LLC and GT Biopharma (GTBP) Midam has been paid $150,000 for a period from March 1, 2021, to April 1, 2021. This compensation is payment 1 of 12 as part of a 12-month agreement between Midam Ventures LLC & GT Biopharma (GTBP), for a period from March 1, 2021, to February 28, 2022. Midam Ventures LLC expects to be paid $150,000 per month for a total of 12 months by GT Biopharma (GTBP). Midam has been paid an additional $150,000 for a period from April 2, 2021, to May 1, 2021. This compensation is payment 2 of 12 as part of the Agreement. Midam has been paid an additional $150,000 for a period from May 2, 2021, to June 1, 2021. This compensation is payment 3 of 12 as part of the Agreement. Midam has been paid an additional $150,000 for a period from June 2, 2021, to July 1, 2021. This compensation is payment 4 of 12 as part of the Agreement. Midam has been paid an additional $200,000 for a period from July 2, 2021, to August 2, 2021. This compensation is payment 5 of 12 as part of the Agreement. We may buy or sell additional shares of GT Biopharma (GTBP) in the open market at any time, including before, during, or after the Website and Information, to provide public dissemination of favorable Information about GT Biopharma (GTBP). Click Here For Full Disclaimer.