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4 Of The Hottest Stocks You Need To Watch!

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Written by Timothy Sykes
Updated 6/30/2023 7 min read

Each day, I make it a habit to update my watchlist, enabling me to identify the most promising opportunities out there.

As the list evolves daily, it prompts me to ask myself what strategy will work the best, and how will I best approach them.

Being prepared is essential, and throughout my 20+ years as a trader, I am constantly adjusting my watchlist to help me focus on those key opportunities as soon as the opening bell sounds.

As we are faced with a short trading week and today’s early market closure…

Time is limited for us to capitalize on the incredible opportunities we are seeing in this incredibly hot market!

Without wasting any more time, let’s dive into the top 3 stocks on my watchlist and discuss my trading plans for them.

Stock #1 – Applied Optoelectronics, Inc. (NASDAQ: AAOI)

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I’m sure all of you have heard of AAOI before based on my previous trades, but I typically don’t forget about a stock after I trade it once…

I often find multiple opportunities along the way.

Here’s the chart…

Source: StocksToTrade

Looking at AAOI, this is the only multiday runners that I like right now…

And if you’re familiar with my strategy, this fits right in with my 7-step PennyStocking Framework.

The longer you trade, the more you’ll start to see these patterns repeat, which can help you prepare for what your next move should be.

AAOI reminds me a lot about Cloudweb, Inc. (OTC: CLOW)…

Be sure to go back and look at the chart, and look at my previous trades to help you see what my exact thought process was every step of the way.

Frankly, AAOI is the best stock out there right now, and I want all of you to be keeping an eye on it.

I’m looking for a big morning panic, or a strong breakout, which it did on Friday…

But with solid volume and news surrounding AI, I think this play could continue higher…

I’m not looking to chase right now, all I’m doing is patiently waiting for it to panic and see what happens over the next few days.

Maybe there will be an opportunity to buy another breakout as the stock consolidates, but only time will tell so make sure this is on your watchlist for the days ahead.

Stock #2 – SoundHound AI, Inc. (NASDAQ: SOUN)

Source: StocksToTrade

SOUN is an AI play that I’m closely watching.

 

The stock has a history of spiking, but in the chart above, you can see it’s potentially setting itself up for a breakout.

Now, remember to look and wait for a stock to have a solid breakout…

Way too often I see newbies buy the initial break out and then the stock gets batted down by short sellers.

 

You can see the stock briefly broke above the $5.00 mark before dropping, so be sure you know what to look for when it comes to this strategy.

 

If there is more volume or news with this play in the coming days, it could easily break out…

But it’s been a little choppy so don’t try and force anything if there isn’t a pattern there for you to take advantage of.

 

Look for a potential dip buy, but I wouldn’t get too overly aggressive with this trade.

More Breaking News

Stock #3- Black Diamond Therapeutics, Inc. (NASDAQ: BDTX)

Source: StocksToTrade

BDTX was a huge spiker last week, and I’m going to be watching this closely to see if panics…

 

But with the decrease in volume as of late, I’m not going to jump right into the first dip I see.

 

I’m still being extra disciplined with my trades, but this stock doesn’t have much of a history of spiking, so I wouldn’t be surprised if it starts gradually declining…

 

Which it has done in the past, so don’t get caught in that trap when it just fades throughout the day.

 

Be sure to wait to see if there is that quick panic of 5-10% early in the morning, then look to lock in that quick dip buy.

 

Be sure to focus on key resistance and support levels to help gauge when to enter your trades…

 

And keep an eye on Level 2 to see if there is a wall of buyers to help the stock bounce as it breaks through that key resistance level.

 

Stock #4 – Diversified Healthcare Trust (NASDAQ: DHC)

Source: StocksToTrade

DHC is a multiday, multiweek runner that I’m still watching for a potential dip buy or strong breakout.

 

You can see that DHC has started to slowly bounce back from a previous resistance level that it broke through earlier in the month, but volume has started to fade.

 

Looking at the history of the chart, the stock has a history of declining before it ramps back up.

 

Right now with the latest bounce, it looks to have held that key support level, so I’ll be watching for it to continue its run.

 

Keep an eye out for any news alerts or possible short squeezes early in the morning as we have been seeing these over-aggressive short sellers lately that are trying to beat the stock back down.

 

Final Thought

 

There will be times when you may not have any stocks on your watchlist that are trade worthy, so don’t go try and force a trade.

 

More often than not, I end up finding other plays thanks to StocksToTrade Breaking News, or spot another giant short squeeze early in the morning by focusing on big percent gainers that may dish out a dip buying opportunity.

Keep scanning the market, but since these four stocks I shared with you today all have potential, don’t just brush them off if they don’t do what you want them to do today…

 

They could easily offer an amazing opportunity a few days from now.

 

I’ll see you in chat.

 

-Tim

 


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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”