Stocks To Trade
Aug. 17, 202314 min read

Penny Stocks on Nasdaq — Top Picks and Investing Tips

Tim BohenAvatar
Written by Tim Bohen

The Nasdaq exchange is a hub for many penny stocks with upside potential. Trading these inexpensive stocks could be a gateway to substantial profits, provided you understand the rules and follow the right guidance.

I’ll never tell you to invest in any penny stock…

I’ve been trading these stocks for almost two decades. I’ve also been teaching my students how to trade them for most of this time. Don’t you think I know better than that?

These stocks are generally less trustworthy than larger-cap symbols. But the ones on the Nasdaq are a little less sketchy than OTC stocks. Some funds and institutional investors have stake in them. And people with Robinhood and Webull accounts can trade them — these brokers don’t allow trading in most OTC penny stocks.

Read on for my top penny stocks to watch on Nasdaq!

What Is Nasdaq?

The Nasdaq is an American stock exchange, known as the home of technology companies. It’s the second largest in the world by market cap, only behind the NYSE. Its logo is the big blue ‘N’.

Think of Nasdaq as the Wall Street of the virtual world. It’s not just a platform for buying and selling securities. It’s also a source for market information that your research tools can cull to help you make informed trading decisions.

Nasdaq isn’t just for the Apples (AAPL) and the Microsofts of the world. It also caters to the little guys — penny stocks. These companies may not have the revenue or market cap of their bigger counterparts, but their shares can be a goldmine for traders who know what they’re doing.

7 Hot Penny Stocks on Nasdaq in 2023

My top 7 Nasdaq penny stocks to watch for 2023 are:

  • NASDAQ: WETG — WeTrade Group Inc. — The Low-Float AI Stock Pick That’s Consolidating
  • NASDAQ: TOP — TOP Financial Group Ltd. — The Chinese IPO Supernova That’s Consolidating 
  • NYSE: CVNA — Carvana Co. — The Short Squeeze Stock
  • NASDAQ: BBIG — Vinco Ventures Inc. — The Meme Penny Stock with No Shares to Short
  • NASDAQ: PSNY — Polestar Automotive Holding Uk Plc — The EV Penny Stock with News
  • NASDAQ: MULN — Mullen Automotive Inc. — The EV Penny Stock Spiker
  • NASDAQ: TMC — The Metals Company Inc. — The Ocean Floor Mining Stock

Just because a stock is performing well now, doesn’t guarantee future performance. That’s where research comes into play. Use your research tools and be vigilant with your own analysis.

I’m not making recommendations nor will I necessarily take positions in these stocks…

Like everything else in trading, your results may vary! This is only a watchlist.

There’s no guarantee I’ll trade any of these stocks. I’m watching them to see if they match my preferred setups — only then will I trade them.

The best traders watch more than they trade — that’s what I’m trying to model here.

Sign up to our NO-COST weekly watchlist here!

WeTrade Group Inc. (NASDAQ: WETG) — The Low-Float AI Stock Pick That’s Consolidating

My first Nasdaq stock pick is WeTrade Group Inc. (NASDAQ: WETG).

WETG is one of the newest AI stocks to keep an eye on. In June, we saw its share price briefly double on a spike. 

The catalyst for this spike was an announcement about a proprietary large language model (LLM) the company has in the making. Since the announcement, WETG has started consolidating around the $10 mark. 

LLMs are predictive content engines used by ChatGPT, Google’s Bard, and other AI chatbots that have taken the industry by storm.

But this is a penny stock. The price action is the only thing that interests me here.

With only 1 million shares, this low-float stock has a higher chance of volatility. That’s why I’m watching it.

TOP Financial Group Ltd. (NASDAQ: TOP) — The Chinese IPO Supernova That’s Consolidating 

My second Nasdaq stock pick is TOP Financial Group Ltd. (NASDAQ: TOP).

In late April, we saw TOP skyrocket over 3,700% in just two days.

This Chinese IPO supernova led to a very short-lived hype in the Chinese IPOs sector. The unusual stock movement led to a halt in TOP trading in May.

Since then, all has been quiet — TOP has held steady around $7 a share.

That’s enough to qualify for my watchlist. Former runners can run again — especially former supernovas like TOP!

Carvana Co. (NYSE: CVNA) — The Short Squeeze Stock

My Nasdaq Robinhood stock pick is Carvana Co. (NYSE: CVNA).

Talk about a short squeeze that keeps on going. CVNA continues to ride a 600% run after skyrocketing in June.

The main reason behind CVNA’s spike is the number of shares outstanding loaned out to short sellers. The stock’s short interest has been at over 50% since May. And Reddit traders definitely have their eyes on this stock.

This stock is making moves that go past the hype. Reference its Q2 earnings call on July 19 — it reduced its debt AND reported its best-ever quarterly profit. 

This short squeeze stock is well on its way to becoming a real stock. But I’d keep my stop-loss tight.

Vinco Ventures Inc. (NASDAQ: BBIG) — The Meme Penny Stock with No Shares to Short

My fourth Nasdaq stock pick is Vinco Ventures Inc. (NASDAQ: BBIG).

BBIG is a long-time meme favorite. In previous years, its catalysts were mostly crypto-related…

Its latest pump put the tabloid paper National Enquirer at the center of its strategy.

Unsurprisingly, BBIG failed to follow through with acquiring the National Enquirer. It’s news catalysts like these that you want to watch out for in crappy meme penny stocks.

Polestar Automotive Holding Uk Plc (NASDAQ: PSNY) — The EV Penny Stock with News

My fifth Nasdaq stock pick is Polestar Automotive Holding Uk Plc (NASDAQ: PSNY).

Two news catalysts sent PSNY stocks trending upward in early July. 

One was a recent report showing record deliveries of over 15,000 vehicles in the second quarter. 

The other was an announcement that Polestar’s North American vehicles will meet Tesla plug standards. Polestar’s existing fleet will also be able to access Tesla charging station’s via an adapter.

These pieces of news were good for small bumps. But the masses aren’t sold on this stock — it still hasn’t shown a path to profitability.

If it does show movement on that front, look for PSNY to go off.

Mullen Automotive Inc. (NASDAQ: MULN) — The EV Penny Stock Spiker

My sixth Nasdaq stock pick is Mullen Automotive Inc. (NASDAQ: MULN).

This EV stock’s prospects are much dimmer than PSNY. It’s had a tough run over the last two years, with a 99% decrease in share prices. 

However, this extremely volatile EV penny stock has spiked in the past. And it can spike again.

It spiked more than 220% in early July. It belatedly joined the trash “illegal short selling” sector…

It’s given back most of those gains. But this silly catalyst showed that MULN can still move.

The Metals Company Inc. (NASDAQ: TMC) — The Ocean Floor Mining Stock

My seventh Nasdaq stock pick is The Metals Company Inc. (NASDAQ: TMC).

TMC is an ocean-floor mining stock looking to tap into sea mining for lower-impact metals for EV batteries.  

It’s part of the EV sector AND has a sexy new technology — what’s not to love?

TMC broke out to a new 52-week high last week… 

Shorts tried to guess the top. If you’ve been following my blog, what happened next won’t surprise you…

The stock has cooled since. But you know the drill…

Former runners can run again.

Benefits of Investing in Penny Stocks on Nasdaq

Think you can’t reap rewards from penny stocks? Think again. Trading on Nasdaq, a global powerhouse in the stock market scene, comes with its own unique set of benefits.

It’s also important to stay informed about the broader trading community’s discussions and trends. For example, Reddit has become a significant platform for traders to share insights and tips. You might find this Reddit penny stocks guide useful in understanding the dynamics of this community. Always remember, the more informed you are, the better your trading decisions will be.

Let’s dig deeper and uncover why you should consider Nasdaq penny stocks.

Liquidity

Trading penny stocks on Nasdaq provides high liquidity. This means you can buy or sell stocks easily without significantly affecting their price. It’s like a bustling marketplace where buyers and sellers are always present.

However, while liquidity is essential, don’t be swayed by volume alone. Also consider the fundamentals and the volatility of the stock.

Transparency & Regulation

Nasdaq is transparent and highly regulated, which can make trading a little less of a Wild West scenario. Information on companies and trades is readily available, helping to cut through the noise.

However, don’t let this lull you into complacency. Always stay alert and conduct your own rigorous research before committing to any trade.

Access to Market Information & Research Tools

Nasdaq provides access to a wealth of market information and research tools. This data is crucial in making informed decisions. It’s like being handed a map and compass in the financial wilderness.

Nevertheless, even with these tools, remember that the market’s behavior is unpredictable. Use the tools, but also trust your own analysis.

Lower Fees & Commissions

Trading on Nasdaq can mean lower fees and commissions compared to some other exchanges. This means more of your gains stay in your account.

But don’t get caught up in the fee structure alone. Remember, a successful trading strategy is more than just low fees.

What to Consider When Investing in Penny Stocks on the Nasdaq

There’s no one-size-fits-all strategy in trading. But, there are some essential points to consider when entering the world of penny stocks on Nasdaq.

When considering investing in penny stocks on Nasdaq, it’s essential to have a reliable platform for executing trades. TD Ameritrade is one such platform that many traders trust. The fact that this broker is merging into Charles Schwab just makes it more attractive for many traders and investors.

Check out this guide to trading penny stocks on TD Ameritrade. Remember, the platform you choose can significantly impact your trading experience, so choose wisely.

Analyze Company Fundamentals

Before investing in penny stocks, take a hard look at company fundamentals. Examine their earnings, revenue, and growth projections. You’re not just buying a stock; you’re buying a piece of the company.

But don’t blindly follow financial analysts. Conduct your own analysis and base your decisions on what you uncover.

Identify Promising Industries

Identifying promising industries can give you a head start in picking penny stocks. Industries like tech or crude oil can offer high-growth opportunities.

Yet, don’t get fixated on one industry. Diversification is key in a successful portfolio.

Use Technical Analysis

Technical analysis involves studying past market data, primarily price and volume. It can be a helpful tool in predicting future price movements.

I use StocksToTrade for all of my charting needs. It’s a powerful trading platform that integrates with most major brokers.

It has the trading indicators, dynamic charts, and stock screening capabilities that traders like me look for in a platform. It also has a selection of add-on alerts services, so you can stay ahead of the curve.

Grab your 14-day StocksToTrade trial today — it’s only $7!

Diversify Your Penny Stock Portfolio

Diversification is a strategy to spread your investments across different stocks and sectors. This can help mitigate risks associated with penny stocks.

But remember, diversification doesn’t guarantee profits. It’s just one aspect of a comprehensive trading strategy.

Develop a Penny Stock Investment Strategy

Developing a strategy is crucial for investing in penny stocks. This includes identifying your investment goals, risk tolerance, and setting up entry and exit points.

But developing a strategy isn’t a one-time thing. Continually refine it based on your performance and market conditions.

Set Investment Goals

Setting clear investment goals can guide your trading decisions. This includes defining your expected returns and the time frame.

But don’t set unrealistic goals. Trading isn’t a get-rich-quick scheme.

Determine the Overall Risk Tolerance

Determining your risk tolerance is a crucial part of investing in penny stocks. This will dictate how much you’re willing to potentially lose in a trade.

But remember, it’s not just about accepting risks. It’s about managing them intelligently.

Set Up Entry & Exit Points

Setting up entry and exit points can help you mitigate potential losses. It defines when to enter a trade and when to cut losses or take profits.

But remember, these points aren’t set in stone. Adjust them based on the market’s behavior.

Execute Trade and Monitoring Performance

Executing trades and monitoring performance is the final step in investing in penny stocks. This is where you put your strategy to the test.

But remember, trading isn’t a one-and-done deal. It’s a continuous learning process.