What Are Meme Stocks? Plus, 7 Meme Stocks to Watch

Meme stocks aren’t running the world … or ruining it. But as traders in 2021, it’s important to know what they are and which ones are worth watching.

These stocks can make wild moves! Who knew that an army of Reddit traders could take out hedge funds? That’s exactly what we saw happen with GameStop (NYSE: GME). We’ve never seen that before.

I think it speaks to the power of the everyday trader. So meme stonks may seem like a joke to some, but I think those powerful moves are awe-inspiring.

You must be ready for it though…

So let’s break it all down. Read on to learn more about meme stocks, how to potentially trade them, and which I keep on my watchlist.

What Are Meme Stocks?

If you’re ‘old’ like me, you probably didn’t know what a “meme” was. And now there’s meme ‘stonks’?

So what are meme stocks?

The meaning of meme stocks is sort of self-explanatory: hyped stocks that perform well … But from a fundamental perspective, they shouldn’t do well at all.

Reddit forums and social media hype drive meme stocks. Speculators on Twitter and Reddit united together to trade their favorite companies in hopes of driving them “to the moon.” 

It may not be fair to call them speculators. These hype beasts want to buy and hold stocks of companies that might not have a great long-term outlook.

Brokerages like Robinhood helped level the playing field with apps and ‘easier’ access. That’s giving retail traders more opportunity. Robinhood traders can buy with just a few clicks on their smartphones and use partial positions to buy chunks of stocks.

And it’s helped create meme stock madness.

The craze took off in January this year when Reddit users noticed heavy short interest in Gamestop. The Reddit users took Gamestop from glorified penny stock to goliath in weeks.

Since then, more companies — and more Reddit traders — joined the mix.

Heavy shorting is often a characteristic of meme stocks. Traders who loathe big money and hedge funds discovered that they can pool their money together… 

That’s how they run the bigger money out of town. Or at least out of short positions.

New money flows into stocks, pushing them higher. In some cases, hedge funds are forced to cover short positions before losing billions of dollars. This is called a short squeeze.

There’d be no meme stocks without Reddit and WallStreetBets. A collective group like that can create serious damage…

Meme Stocks to Watch

Keep up with the crazy meme stock world and more — join me LIVE each morning at 8:30 Eastern for my Pre-Market Prep sessions. I’ll dig through the top news and stocks of the day to help you start your trading day.

And meme stocks often find a way to become relevant during the week … In day trades and swing trades, momentum is one of the key things we look for. That’s why it’s important to know about meme stocks and how they move.

I’ve discussed the importance of making watchlists at length, and this would be a good opportunity to start if you haven’t already. Make a meme stocks watchlist so you can be ready for the next big move. Odds are it will come in handy at some point!

A great way to help build your watchlists is to keep up with the news. With StocksToTrade’s Breaking News Chat, you’ll get the hottest market news that can supercharge stock moves. Grab your 14-day trial of STT + BNC today for just $17!

And, as a reminder, this is just a list of stocks to watch. Always do your own research. I’m sharing this list with you to help you understand all the factors you must consider. Remember to tailor your watchlist to your strategy. 

Now, let’s look at my list of meme stocks…

Meme Stocks to Watch #1: GameStop (NYSE: GME)

GameStop (NYSE: GME), as I already mentioned, is the reason for this list. GameStop was trading at $17 a share to begin the year. It was nearing $350 three weeks later. At its peak, it was over $480 per share!

Since then, it has traded between $120 and $305. There’s really no telling where it’s headed next…

That’s what’s fun about meme stocks — they’re unpredictable.

We all know gamers gravitated toward buying digital copies of games, right? So unless GameStop can carve out a new niche for itself, it will eventually die.

Reddit doesn’t care, though, so it’s worth watching (and trading).

Meme Stocks to Watch #2: AMC (NYSE: AMC)

Save the movie theatres!

AMC (NYSE: AMC) didn’t have an epic explosion like GameStop, but it did go from $2 to $20 back in January. It fell back to $12 and recently shot up to over $60.

There’s at least something fundamental about this one with the reopening wave. Does anyone really like watching movies from home? I guess we’ll see how it all plays out.

AMC is still being shorted (by morons, IMO) and therefore being squeezed. This means AMC still might have some juice left.

Meme Stocks to Watch #3: Clover Health (NASDAQ: CLOV)

Clover Health (NASDAQ: CLOV) may not be the ‘king of memes’ … but I think it’s still worth watching.

Clover Health is a healthcare insurance provider that had its IPO in 2020. It missed the initial “meme stock bounce” in January but shot up 144% in June.

There has been a good amount of volume in CLOV as of late — and that’s one reason that makes it worth watching. And on top of that, it is a favorite of WallStreetBets. Any good news could send it flying…

Meme Stocks to Watch #4: Workhorse (NASDAQ: WKHS)

No doubt I love electric vehicles and think anything related to EVs is worth keeping an eye on. Workhorse (NASDAQ: WKHS) designs and manufactures EV trucks, aircraft, and drones. So it could have potential both as a meme pick and EV runner.

But has his stock already had its day in the sun? WKHS had a 78% run in January and has fallen from $41 to the mid-teens since…

The resignation of Lordstown’s CEO and CFO hit the EV sector. But we know former runners can run again. I’d say it’s at least worth putting WKHS on your watchlist and waiting to see if it can come back to better days.

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Meme Stocks to Watch #5: Blackberry (NYSE: BB)

Blackberry (NYSE: BB) was another January high-flyer, tripling its share value within the month. 

Today’s Blackberry probably isn’t the one you’re thinking of (if you’ve even been around long enough to remember its old PDA days). BB doesn’t make phones anymore. 

Now, the company focuses on cybersecurity, the internet of things, and artificial intelligence.

With so many “smart” devices these days, there are more opportunities for data breaches. Blackberry’s mission is to secure all of those devices.

Blackberry peaked at $25 in January and tumbled back down to less than $8 a share. It had a nice run to begin June and now sits just shy of $13.

This one may need some more pullback before it’s trade worthy. I’d keep it on the watchlist just in case.

Meme Stocks to Watch #6: Wendy’s (NASDAQ: WEN)

Here’s Wendy’s (NASDAQ: WEN): good hamburger, stay-away stock. But if this year has taught us anything, it’s that there might not be such a thing as a “stay-away” when it comes to meme stocks.

Wendy’s has been lightly traded over the past year and has barely budged in price. It had a huge jump the second week of June and has already fallen back to earth. 

But it has proven it has the capability of making a big leap.

The fast-food chain is coming off a strong earnings report and just expanded its partnership with “Rick and Morty.” It’s worth keeping an eye on.

Craving more hands-on help and mentorship for your trading? Join our SteadyTrade Team for pro-level guidance!

Meme Stocks to Watch #7: ContextLogic (NASDAQ: WISH)

All memes aside, the parent company of the Wish e-commerce platform, ContextLogic (NASDAQ: WISH) is worth watching. The company’s recent partnership with open source e-commerce platform PrestaShop makes it even more intriguing.

This partnership will connect PrestaShop’s merchants with Wish’s consumers, opening a new door for revenue.

WISH entered the public markets at the end of 2020 and has trickled down since. It broke $31 in February and now sits below $12. It did shoot up after the partnership announcement and has seen nice volume as of late…

This could be a watchlist staple if the volume holds up.

Get My Watchlist Every Week

Want the most watch-worthy stocks for the week ahead delivered to you at no cost every Sunday? Sign up for my weekly watchlist here! 

I send you the top five stocks on my radar. I use my StocksToTrade scans to spot tickers with the potential to make big moves for the week. It’s all to help you prep for the week and learn to spot the right stocks for your strategy.

Conclusion

That’s a wrap on my seven top meme stocks to watch. It sure has been a fun ride this year, watching stocks that have NO BUSINESS doing well run to the moon.

Some people hate it. I understand that. It’s easier for retail traders to be active in the market now. That means more shenanigans in the market.

Meme stocks may soon fade forever … or they may never die. Either way, more money in the market is a good thing for every prepared trader. That means more opportunities to make money!

Many of these stocks will come and go, but some will stick around for the long haul. GameStop and AMC have stuck around far longer than many of us anticipated. I know I’ll be watching to see which stocks join them next…

What’s your experience trading meme stocks? What do you think of the show? Let me know with a comment below!