There are almost too many top penny stocks to watch for December 2020. If you’re feeling overwhelmed with the number of potential plays, you’re not alone.
The major indexes are trading at, or near, all-time highs. The Dow finally passed the 30,000 milestone on November 24 during a short holiday trading week.
An already hot electric vehicle (EV) sector is hitting a new gear. We’re also seeing a post-election influence in the cannabis sector. Add potential approval of multiple coronavirus vaccines to the mix. Then stir in newbie Robinhood speculation and Twitter promoters…
It looks like December could close out the year with a bang. I don’t like to predict, but I’m loving this market. Are you ready for the top penny stocks to watch in December 2020? Let’s do this…
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.
(Sign up for my weekly stock watchlist here…FREE OF CHARGE)
Let’s get right to the list of top penny stocks to watch in December 2020…
Top 5 Penny Stocks To Watch for December 2020
Driven by sector leader Tesla (NASDAQ: TSLA), EV stocks are the hottest in the market. Anything related — like lithium battery companies — can spike, too.
The entire sector was already on a tear for much of the year. Then two significant EV news catalysts happened…
On November 14, news of U.K. government plans to ban sales of new gas powered cars in 2030 leaked. Then, on November 17, news hit that Tesla will join the S&P 500. That helped fuel another big spike. (See what I did there?)
To help put things in perspective, check out the TSLA one-year chart:
I often get asked about sympathy plays, and this is a great example. TSLA is up 794% on the year. That’s almost unheard-of for a large-cap stock. It creates big opportunities for trading all the wannabe EV companies.
Now let’s check out the top penny stocks to watch in December 2020. There’s just one caveat: The first stock technically isn’t a penny stock…
Blink Charging Co. (NASDAQ: BLNK)
Blink Charging Co. designs, manufactures, owns, and operates EV charging stations. BLNK broke through multi-week resistance on November 16. On that day, the company announced a new cable management system.
Here’s the BLNK six-month chart:
BLNK was trading in penny stock range as recently as late June. Thanks to a combination of positive news, a hot sector, and a giant short squeeze, BLNK went full supernova.
I don’t really like trading such high-priced plays, but if it panics enough I might scoop some up for a probable bounce. Meanwhile, I’ll keep watching.
ADOMANI Inc (OTCQB: ADOM)
ADOMANI designs zero-emission electric and hybrid drivetrain systems. It also provides zero-emission electric fleet vehicles and conversion kits for school buses. ADOM started spiking along with the rest of the sector around the middle of November. As the old adage goes … a rising tide lifts all boats.
Here’s the ADOM six-month chart:
I traded ADOM twice on November 24 — one short and one long. It was one of the few short positions I’ve taken in the past year. On a day when the entire sector was weak, I was early — losing $150.
When the big tank came later in the day, I bought the dip, but the bounce was weak. In the end, I netted a whopping $28 on ADOM that day.
At the time of this writing, ADOM was up 319% in November. So I’ll keep watching for a dip buy on any big morning panic. Or for a potential breakout with volume and, ideally, news.
Let’s look at another related sector stock…
FuelCell Energy Inc. (NASDAQ: FCEL)
FuelCell Energy designs and manufactures fuel cells that convert chemical energy into electricity. While FCEL isn’t an EV stock, fuel-cell technology is part of the bigger green revolution.
Check out the FCEL three-month chart:
FCEL is another ticker technically trading above penny stock range. Again, I don’t like trading high-priced plays, and I’m not interested in chasing. I’ll watch for potential dip buys on any big morning/intraday panic.
Because there are SO many stocks to watch right now…
Honorable Mention EV/Renewable Energy Penny Stocks to Watch for December 2020
- Alpine 4 Technologies Ltd. (OTCQB: ALPP) Up 703% in November. Hit a 52-week high of 43 cents a share on November 27.
- CBAK Energy Technology Inc. (NASDAQ: CBAT) Up 230% since the beginning of November. Hit a 52-week high of $11.40 on November 16.
For the next stock, we’ll move on from EV/energy to another hot sector, digital payment processing…
Tesoro Enterprises Inc (OTCPK: TSNP)
On November 12, Tesoro announced a merger with digital payment company HUMBL, LLC. Once complete, the new financial services company plans to trade under a new ticker.
A series of press releases, like news of expanding into Asian markets, has kept the stock trending up. There’s also a ton of blatant pumping happening on Twitter.
Check out the TSNP three-month chart:
As you can see, TSNP had a big breakout on November 27, spiking 168%. I’ve traded the stock — long only — 11 times during its run. (FYI: I’ve never shorted any stock this low priced. It’s a VERY dangerous strategy.)
TSNP has shown incredible strength. It’s up a whopping 2,366% since November 12 when it started the day as a sub-penny stock. Trade TSNP with caution. Due to the blatant pumping, it could tank once the promoters stop.
I’ll continue to react to price action rather than guess. If it keeps going, I’ll look to buy into any big intraday panics.
Our final top penny stock to watch in December is in the cannabis sector, which got a boost due to the upcoming vote on the MORE Act of 2019…
MariMed Inc (OTCQX: MRMD)
MariMed Inc. started as an advisor to clients in the cannabis industry. The company helped producers and dispensaries to meet regulatory standards. MariMed then introduced its own brand called Nature’s Heritage Cannabis.
On November 16, the company introduced RSO Capsules, its latest product. (Made with high-THC RSO cannabis oil. Whatever that means. Apparently, it’s good for medical marijuana.)
Here’s the MRMD six-month chart:
As you can see, MRMD had a big multi-month breakout on November 25 and finished the day up over 58%. MRMD has proved it can spike with volume and news. It also proved it can bounce after recovering from a 38% panic on November 27. I won’t chase, but it’s a potential dip buy into any big panic.
Again, with so many penny stocks to watch right now…
Honorable Mention Cannabis Penny Stocks to Watch for December 2020
- Aphria Inc. (NASDAQ: APHA) Up 71% in November. Hit a 52-week high on November 27.
- Aurora Cannabis Inc. (NYSE: ACB) Up 158% in November. I don’t like three-letter tickers much and ACB is trading well off its 52-week high of $32.88. But whenever weed stocks are hot, it’s worth watching ACB. The company is one of the bigger players in the sector.
That’s it for the best penny stocks to watch for December 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.
Why?
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’s 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 a stock makes a big percent gain, but the trading volume is so low it doesn’t make sense to trade it. One of the top penny stocks to watch this month, Rivex Technology, is tough to trade because the volume is so low.
So 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
This 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.
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.
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.)
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
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 December 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.
Remember…
… 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 December 2020 watchlist? Comment below, I love to hear from all my readers!
The post Top Penny Stocks to Watch for December 2020 appeared first on Timothy Sykes.