Welcome to the top penny stocks to watch for October 2020. There are still SO many opportunities in the market right now. If you’re not taking advantage of them, at least use this time to learn.
To start October, I’m keeping electric vehicle (EV) and lithium-ion battery plays on my watchlist. Why? Check this out…
On September 28, Piedmont Lithium Ltd. (NASDAQ: PLL) announced a deal to supply lithium to Tesla (NASDAQ: TSLA) for five years. The announcement came less than a week after Tesla’s aptly named Battery Day. In that presentation, CEO Elon Musk spoke of a need to create a domestic supply chain for battery metals.
When you see news of a major company like Tesla signing a five-year deal … look for other sector-related plays. Several lithium stocks spiked in sympathy to PLL. I’ve included three on this month’s watchlist. For more on how to create your own watchlist, keep reading.
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 FREE weekly stock watchlist here.)
Let’s get right to the list of top penny stocks to watch in October 2020…
Top 5 Penny Stocks to Watch October 2020
The first three penny stocks to watch for October 2020 are in the EV and/or lithium-ion battery sector. The last two are solar stocks. Both EV and solar have been hot enough recently to create solid sector momentum.
For example, the Piedmont/Tesla deal set off a series of lithium battery sympathy plays…
American Battery Metals Corp (OTCQB: ABML)
American Battery Metals is a lithium-ion battery tech company headquartered in Nevada. It aims to supply the domestic EV market with lithium and other battery-grade metals. The company also has a closed-loop recycling facility for end-of-life batteries.
The same day Piedmont Lithium announced its deal with Tesla, ABML spiked in sympathy.
Here’s the ABML six-month chart:
As you can see, it was a clean multi-month breakout. Now take a look at the ABML intraday chart from September 28:
I traded ABML three times on September 28. On the first trade, I bought a little dip off the morning high. I sold into strength on the breakout for a $3,892 win. The second trade was a dip buy on the panic but I was a little early and lost $288.*
The third trade was another small win as ABML just kept hitting new highs.*
(*These results are not typical. Individual results will vary. Most traders lose money. My top students have the benefit of many years of hard work and dedication. Trading is inherently risky. Always do your due diligence and never risk more than you can afford to lose.)
Special thanks to the StocksToTrade Breaking News Chat team for the initial alert.
(Quick disclaimer: I helped design and develop StocksToTrade.)
I’ll keep watching ABML — it’s a potential dip buy into any big panic. The higher it goes, the more likely I am to take a bigger position size if/when it does panic. Especially if it becomes a multi-day runner.
American Lithium (OTCQB: LIACF)
American Lithium is a Canada-based lithium company with holdings in Nevada. It’s currently developing its own lithium separation technology.
Aside from its OTC listing, the company is listed on the Frankfurt exchange and the Toronto Stock Exchange (TSX). The company recently acquired land within three hours of Tesla’s Gigafactory.
LIACF was uptrending slowly in April and May. Positive test results of a new process to extract lithium from clay spiked the stock in June. Then in July, LIACF had a solid three-day run on news of reduced royalties on the Nevada land acquisition.
Here’s the six-month LIACF chart:
As you can see from the chart, LIACF had a solid first green day in sympathy to the Piedmont Lithium/Tesla deal. (The green daily candle at the far right.) As it was one of the few non-overextended battery plays, I took an overnight position. I sold at the market open for a $1,470 profit.*
I’ll keep watching LIACF. Let’s see if it can run for multiple days.
Flux Power Holdings Inc. (NASDAQ: FLUX)
Flux develops and sells rechargeable lithium-ion batteries for industrial use. Examples are forklifts, stackers, and ground support equipment at airports. The company’s products use its Battery Management System (BMS) for longer life.
FLUX was an earnings winner in after-hours trading on September 28. The stock spiked from the mid $5s to the mid $9s in a matter of minutes before pulling back.
With FLUX, I’m watching to see how high it can go. I’d love to see it turn into a multi-day runner and get overextended for a panic dip buy — maybe early next week.
Thanks to the Piedmont Lithium/Tesla deal, battery and lithium stocks are in play. So outside of groundbreaking news in another sector, this is my focus.
Now, to round out our top penny stocks to watch in October 2020, two solar energy stocks…
The Peck Company Holdings Inc (NASDAQ: PECK)
Staying with the green energy theme is Peck Company Holdings. The company has three main verticals in solar, electric, and data infrastructure/support. Its primary business is the design and construction of multi-megawatt solar systems.
PECK ran in sympathy to Sunworks, Inc. (see the next stock) and SPI Energy (NASDAQ: SPI) on September 24. PECK had several volatility halts that day. See the PECK chart from September 24 in this recent edition of the Millionaire Mentor Update.
Now take a look at the PECK six-month chart:
I traded PECK twice on September 24 and once again on September 28. The best was an $8,395 win on September 24.* See ALL my trades here. PECK is a potential dip buy into any big panic.
Now for the last of the top penny stocks to watch for October 2020…
Sunworks Inc. (NASDAQ: SUNW)
Sunworks is a solar installation company in the agricultural, industrial, and residential markets.
SUNW ran in sympathy to SPI on September 23 and 24. Then it pulled back sharply after announcing a delisting notice from the Nasdaq.
Take a look at the SUNW six-month chart:
As you can see, the stock was highly volatile for several days at the end of September. (Watch my no-cost “Volatility Survival Guide” to see why I love volatility and you should, too.)
Now take a look at the five-day SUNW chart showing the crazy price swings…
Over the years I’ve traded this one a few times — including a relatively big loss nearly twenty years ago. My recent trades are this $4,320 win on September 23. And this $3,546 win on September 28.*
SUNW is a very choppy stock. I don’t chase choppy stocks, but I don’t mind buying the dip. With that in mind, I’ll keep watching SUNW for any big panic to buy into.
That’s it for the best penny stocks to watch for October 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 October 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 October 2020 watchlist? Comment below, I love to hear from all my readers!
The post Top Penny Stocks to Watch for October 2020 appeared first on Timothy Sykes.