WEEKLY PENNY STOCK MARKET RECAP $CERC $OGXI $JMP $DRYS $MSDI
So we got G20 this weekend and the politics is the main topic. It is, of course, important to follow politics to understand market sentiments while political environment can effect financial markets.
USA stock indices closed in red this week but can we say we are going down – no, will we have bigger correction can be, but for now we can see the indices are trading in the range or near support levels.
Now let’s review some of this week’s volatile penny stocks.
$JMP, $OGXI, $CERC – I will write about these stocks as a whole while I want to point to obvious price behavior many such penny stocks tend to show. They tend to go north very easy if there is enough volume or willing buyers who help stock price to climb higher.
But the second day, if the micro cap can hold the gains previous day, it tends to crash making a great opportunity to a savvy short seller to profit. Of course, you need to have good stockbroker which could provide you with shortbale shares.
So the recipe for success – huge stocks price spike with no news. Stock must hold it’s gains above 30% for the first day. Second day it tends to crash.
$DRYS – the paradise for short sellers! I will not widen with my writings here but those who know stock’s fundamentals know that toxic financing is the premise for a downtrend and reverse splits are here to help the stock to get back its price to comply with Nasdaq’s listing rules so people in power could continue spiraling the price to pennies again. Watch video if you do not understand a word I just wrote:)
$MSDI – There were interesting news regarding the company. It did reverse merger with Innovate Biopharmaceuticals (which soon or maybe already legally became the majority shareholder of $MSDI), so this private company could bypass IPO expenses and will use $MSDI as a shell company to access more capital that is needed for Innovate Biopharmaceuticals’ R&D. I know I am biased here (I tend to work more on the short side when trading) but these reverse mergers, especially with biotech company, should be looked with caution while company’s main concern is to access more capital (in simple words burn more money) for outgoing clinical research while there are no talks about marketing and commercializing the drugs while they need to successfully finish at least one 3rd clinical research to go to marketing phase so it can start making money. But I understand my flaws and I am definitely not a Ph.D. in biotech, but if history has some value I can say be careful investing in new $MSDI which is gonna be far away from its main activities while biotech people who took over will definitely be more focused on their R&D.