How To Get Into Trading Penny Stocks

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How To Get Into Trading Penny Stocks – Technical analysis (TA) involves the careful study of stock chart patterns and trends. Although this skill set may seem daunting at first, even beginners can incorporate a few select TA methodologies into their investment strategy to achieve great success.

TA can be especially useful in predicting the movements of penny stocks due to their volatility – provided there is enough trading volume to back up the patterns you are trying to find.

How To Get Into Trading Penny Stocks

How To Get Into Trading Penny Stocks

Below is a list of several penny stocks with interesting technical setups. Remember to move quickly and exit your position if the stock does not behave as you expect, as this may indicate that the trend or signal has changed or failed.

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Some of the settings described below may no longer be relevant or intact by the time you read this article. Please do your own due diligence. Note that penny stocks are notoriously volatile.

GOTU is a Chinese technology education company with a market capitalization of approximately US$600 million as of January 2, 2023, making it a small-cap company. The company’s core expertise is in providing online K-12 courses worldwide. It also provides online after-school tutoring to K-12 students in mainland China. The company was founded in 2014 and is headquartered in Beijing.

In January 2021, GOTU traded as high as $149.05. Since then, it has been in a long-term downward trend. Last November, the stock was trading at less than a dollar a share. He has since recovered and seems to be doing better. After recovering from its November 2022 lows, it has continued its impressive price growth. Shares were trading as low as $4.25 in late December 2022 (see chart below). It had a short reaction but looks like it will try to retest the December highs.

Vyant Bio Inc. (VYNT) is a small-cap company in the healthcare and biotechnology industry. Its market capitalization as of January 6 was about $4 million. It was founded in 1999 in Cherry Hill, New Jersey. The company is engaged in drug discovery for complex neurodevelopmental and neurodegenerative disorders.

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After hitting a high of $84.50 on February 10, 2021, the stock reversed and entered a sustained downtrend for the rest of 2021 and 2022. The gap up on January 5, 2023 (see chart below) may indicate the stock is finally bottoming out . The entire gap area becomes a support. So if the stock can stay above the bottom of the gap while testing support, it will be a successful test and may point to more positives for the stock price.

Safe Bulkers Inc. (SB) is a Small Cap Company in the Industrials sector. The stock reversed and entered a downtrend in June 2022. It found support at its 200-day moving average and continued to trade sideways, making a series of higher lows in the process.

Positive price divergence and Moving Average Convergence Divergence (MACD) are further evidence of a possible future reversal of the previous downtrend. The stock price has now moved above the 50-day moving average and the moving average is turning up (see chart below). The price still seems to be trading sideways, so a definitive break to the upside will be evidence that it has left its downtrend and is possibly entering a new uptrend.

How To Get Into Trading Penny Stocks

Atara Biotherapeutics Inc. (ATRA) is a small-cap biotechnology company in the healthcare sector. After touching a high of $28.20 in December 2020, its price declined and reached a low of under $3 in August 2022.

Trading Penny Stocks?

However, after a successful test of previous lows, green shoots of promise appear to be emerging. In December 2022, the stock fell and found support at the August 2022 low. It was a successful test and the stock moved higher in December 2022 (see chart below). It is possible that the support will remain and the price will continue to move higher, but there are no guarantees in technical analysis.

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How To Get Into Trading Penny Stocks

On the plus side, penny stocks offer a cheap chance to buy winners; on the other hand, they can be difficult to research and trade. Bill Oxford/Getty Images

The Complete Tata Group Penny Stocks List

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Penny stocks have become more popular than ever, luring investors with low entry costs and the prospect of significant financial gains. Stories of stocks earning more than 4,000% in just months add to their appeal, and new trading technology makes it easier than ever to enter the market.

But while they can be lucrative, penny stocks come with significant risk. Potential investors should be careful to understand what they are getting into.

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Penny stocks refer to shares of a company that cost, if not a mere penny, a fairly low amount. In the US, the SEC defines them as those trading at less than $5 per share. Because they are often sold “over the counter” (OTC), rather than on centralized exchanges, they are also sometimes called OTCstocks.

Depending on the issuing company’s market capitalization — the total dollar value of its shares outstanding — penny stocks can be referred to as small-cap, micro-cap, or nano-cap stocks.

Penny stocks are usually issued by new or very small companies. These companies often don’t have the kind of history to generate investor interest, which is why their shares sell for so little. Larger, more established companies may also have shares trading below $5 when they are facing financial difficulties or approaching bankruptcy.

How To Get Into Trading Penny Stocks

However, they are much more often traded over the counter, through a network of brokers and dealers, rather than in a centralized market. OTC Link LLC and OTC Bulletin Board are the two main penny stock exchanges.

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Penny stocks attract individuals who are comfortable with high-risk trading—typically very experienced investors who are able to distinguish small, high-value startups with high potential from low-value companies.

Freely regulated hedge funds, short sellers and speculators are all other common participants in the penny stock market. Some mutual funds, such as the Fidelity Low-Priced Stock Fund (FLPSX) and ETFs, trade primarily in penny stocks.

You’d have to spend thousands of dollars to get a lot of Facebook or Google stock—if you were buying whole shares and not fractional shares—but you can spend a lot less to get into the penny stock market. The idea of ​​buying shares of a solid startup at $0.20 and getting paid $1 — or even much more — is appealing to many investors.

It’s every investor’s dream: to catch an unknown star before it’s discovered and ride it as it rises. As strange as it sounds, Amazon (AMZN) was once like that. Back in 1997, you could buy Amazon stock for $1.68; back in 1998 you could get them for $5. Amazon currently trades for much more.

Blue Chip & Penny Stock

Penny stock trading can be

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