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Jan. 24, 2021, 12:28 p.m. EST

4 Hot Penny Stocks To Watch Before Monday's Opening Bell

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Jan 24, 2021 (Penny Stocks via COMTEX) -- 4 Penny Stocks Heating Up Late Friday Afternoon

Monday marks the start of the final trading week in January & we're sure to see plenty of penny stocks on the watch list. I get that the weekends can be a boring time for many traders, especially if you're new. Because so many of these cheap stocks have exploded this month, anticipation for what's next is high, for sure. I think one of the glaring indicators suggesting big momentum in small-caps recently has been the Russell 2000 Small-Cap ETF ( IWM ).

Take a look at Friday's session. We saw the S&P ETF ( SPY ) and the Invesco NASDAQ ETF ( QQQ ) both make attempts at rebounding from lows. While they did, in fact, bounce from intra-day lows, neither experienced the rally that the IWM did. Breaking it down to the numbers, the SPY closed 0.27% above its low, the QQQ closed 0.21% higher, but the IWM managed a rebound of 2.6% after hitting its low of $209.54 Friday morning.

Something else we discuss is volume. Many of the high volume penny stocks last week were heavily traded due to the increased trading activity in the market. In many cases, traders look for stocks with increasing volume to suggest a stronger trend. Similarly, we can look at the volumes of these benchmark ETFs to see if there is a trend to note.

[Read More] 4 Robinhood Penny Stocks To Watch As Market Tests New Highs

For this, let's compare volume from the beginning of last week to Friday's volume. The SPY volume increased roughly 1.76% from Monday to Friday. QQQ actually saw a decrease in volume of just over 11% from Monday to Friday. But once again, we see that IWM outpaced both with an increase in volume of 25.6% between Monday's and Friday's volume.

I'm throwing a lot of numbers at you right now. But the bottom line I want to get at is small-cap stocks are clearly experiencing a larger change & boost in activity based on these numbers. Keeping this in mind, here are a few hot penny stocks to watch before Monday's opening bell. All of them saw a surge in momentum after the close on Friday.

Hot Penny Stocks To Watch

We've got a nice mix of names on this list of penny stocks. Some are focused on tech, others are traditional retail, but the first few are biotech. In this regard, we've discussed the excitement in biotech penny stocks recently. It's not only thanks to the attention brought by vaccine development but also by the fact that these stocks are some of the more actively traded, volatile names in the market. InVivo is an example of one. Since the Christmas holiday week, shares of NVIV stock have climbed by nearly 150% so far. Last week was one of the bigger weeks during that period as InVivo moved up more than 40% alone. Furthermore, Friday's aftermarket session saw NVIV stock jump from the $1.40 close to $1.85.

One of the interesting things to note is that the company hasn't been very vocal during this 150% move. In fact, the last formal update from InVivo came in October when the company announced closing a $15 million offering. The time between then and now has, however, seen some growing institutional interest. Bigger Capital Fund, L1 Capital, Sabby Management, and Lind Global have all filed Form 13G's during the last few months.

Despite not having much news, medical stocks have been a recent focus for traders. InVivo specializes in therapies for chronic spinal cord injury and has been vocal on Twitter regarding its advancements. In its most recent tweet, the company focused on a recent interview with Nobel Prize Recipient Sir Richard Roberts, Ph.D., F.R.S. on spinal cord injury. Roberts is also a member of InVivo's scientific advisory board, the board of directors, and chief scientific officer of New England BioLabs.

Another one of the active penny stocks to watch from Friday is Atossa Therapeutics. It's been on our watch list for several weeks now as well. Since gapping down in early December, the ATOS stock price has climbed from around 90 cents to highs last week of over $2.06. First, why the drop? As we know, public companies use the markets to raise money. In this case, Atossa announced a $20 million offering but at a steep discount to the current trading levels at the time. December's drop wasn't a result of bad data or anything like that but simply the market's reaction to a heavily discounted financing round.

However, with fresh capital in hand, Atossa continued executing its plan. The company targets breast cancer, more recently, COVID-19. The company has a Phase I study to see the efficacy of its drug, AT-301. This is a nasal spray that can be taken at home by those suffering from the coronavirus. Dosing is complete, and data output is expected this month. According to the company, its preliminary assessment is that AT-301 nasal spray was safe and well-tolerated in this study. Atossa explained that these results support advancing this program into a Phase 2 study. In December, the company submitted a pre-IND meeting request with the U.S. FDA.

Aside from the potential AT-301 results, Atossa plans to begin the initial clinical study of AT-H201 this quarter as well. This is the company's treatment to improve compromised lung function for moderate to severely ill, hospitalized COVID-19 patients by inhalation. Atossa has already filed provisional patent applications on AT-H201 to treat COVID-19 patients and AT-301 to treat patients diagnosed with, or to prevent, COVID-19 via nasal spray.

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