Trader Tips
Apr. 4, 202419 min read

Top 5 Penny Stocks to Watch in 2024

Tim BohenAvatar
Written by Tim Bohen

So far this year, the allure of penny stocks remains strong among traders seeking high potential returns from low-priced shares. Characterized by their low price and high volatility, these stocks can offer significant rewards, as well as risks. Identifying promising penny stocks is a blend of art and science, which requires diligent research and an understanding of market dynamics.

Top Penny Stock Picks

My top penny stock picks for 2024 — rated on chart pattern, price action history, and news — include the following:

Stock Ticker Company Performance (YTD)
NASDAQ: BMR Beamr Imaging Ltd + 289.44%
NASDAQ: SOUN SoundHound AI Inc + 190.14%
NASDAQ: NNOX Nano-X Imaging Ltd + 64.24%
NASDAQ: LUNR Intuitive Machines, Inc + 126.27%
NASDAQ: HOLO MicroCloud Hologram Inc + 124.58%

Before diving into specific picks, it’s crucial to understand what sets these investments apart and how to approach them with a strategic mindset.

The penny stocks on this list are some of the wildest movers on the market …

Trading any of these stocks should be approached with a clear strategy and an understanding of the risks involved. I don’t trade until I see a setup I like.

Jump ahead to get to my trading plans for these top penny stocks!

What Is a Penny Stock?

Penny stocks are shares of companies that trade at relatively low prices, often below $5. They are typically associated with small-cap companies and are known for their high volatility and speculative nature. Trading in over-the-counter (OTC) markets as well as major exchanges like Nasdaq and the New York Stock Exchange (NYSE), these stocks offer a gateway to trading in companies that might not yet meet the listing criteria of larger exchanges. Despite their potential for significant returns, the world of penny stocks comes with its own set of risks and requires diligent research and a well-thought-out strategy.

Why Do Investors Buy Penny Stocks?

Investors are drawn to penny stocks for the opportunity to achieve substantial gains from relatively small investments. The low share price allows traders to acquire a larger number of shares with a modest amount of capital, amplifying the impact of even minor price movements. However, this potential for growth comes with increased risk, making it imperative for investors to conduct thorough research and analysis before diving in.

Top Penny Stocks to Watch

My top 5 penny stock picks for 2024 are:

  • NASDAQ: BMR — Beamr Imaging Ltd — The NVIDIA Partnership AI Stock
  • NASDAQ: SOUN — SoundHound AI Inc — The Former Runner With NVIDIA News
  • NASDAQ: NNOX — Nano-X Imaging Ltd — Yet Another NVIDIA Catalyst AI Stock
  • NASDAQ: LUNR — Intuitive Machines, Inc. — The Moon Landing Moonshot Stock
  • NASDAQ: HOLO — MicroCloud Hologram Inc — The Parabolic Short Squeeze That I’m Watching for a Dip and Rip

This year is shaping up to be a big one for penny stock trading. From my 15-plus years of experience in trading and teaching, I’ve learned the importance of scrutinizing various factors that can signal a penny stock’s potential for growth or decline. This includes analyzing market capitalization, trading volume, and the company’s position within the stock market sectors.

Penny stocks, often characterized by their volatile nature, offer a playground for investors and traders seeking substantial gains from small-cap companies. These stocks can be HUGE for building a small account. However, the journey is fraught with risks, from fluctuating demand to unpredictable earnings reports and changes in market sentiment influenced by Wall Street analysts and financial news.

In identifying the top penny stocks to watch, we’re looking beyond price points. We have to dive into the financial health of companies, scrutinize their earnings reports, and assess their standing among gainers in the stock market. The goal is to unearth those hidden gems with the potential for significant upside, supported by solid fundamentals, innovative business models, or sectors showing strong momentum.

This curated watchlist is not just a collection of names; it’s a result of meticulous research and analysis, leveraging various tools and resources—from technical chart patterns to expert analysts’ recommendations and reviews. Whether it’s the burgeoning energy sector catching the wind of crude oil price movements or tech startups on the brink of breakthroughs, the selected penny stocks represent a cross-section of industries with the potential to disrupt markets and deliver impressive returns.

The world of penny stocks is as diverse as it is dynamic, spanning across continents from North America to Europe, encompassing sectors from finance to technology, and involving currencies beyond the dollar. With the right approach, guided by thorough research and informed by a comprehensive understanding of market trends and risk levels, traders can navigate this complex landscape. The stocks on this watchlist have been chosen for their unique position within the market, trading volume that indicates investor interest, and the potential for significant gains.

Before you send in your orders, take note: I have NO plans to trade these stocks unless they fit my preferred setups. This is only a watchlist.

The best traders watch more than they trade. That’s what I’m trying to model in this article. Pay attention to the work that goes in, not the picks that come out.

Sign up for my NO-COST weekly watchlist to get my latest picks!

#1: Beamr Imaging Ltd (NASDAQ: BMR) — The NVIDIA Partnership AI Stock

My first stock pick is Beamr Imaging Ltd (NASDAQ: BMR).

On February 12, at 7 A.M. Eastern during premarket hours, it announced a partnership with NVIDIA Corporation (NASDAQ: NVDA). 

NVDA is arguably the most popular company in the world right now.

It’s surging to new heights as the tech sector scrambles for NVDA microchips. The massive tech stock is smashing company value records and even pushed past other +$1 trillion tech businesses like Meta Platforms Inc. (NASDAQ: META).

A hook up with a sector leader like NVDA is HUGE news for a penny stock.

The share price spiked 1,500% in less than 24 hours. And it reminds me of another intense spiker that started running only a few days earlier on February 7.

MicroCloud Hologram Inc. (NASDAQ: HOLO) managed to spike 2,600% in a similarly spectacular fashion. But when the price slid lower, it consolidated for a few days before breaking out and reaching $98 per share!

The stock was trading below $2 less than two weeks before … That’s a 6,400% move.

Currently, BMR is consolidating above a key level despite a February 14 offering of 400,000 shares.

Watch my video below for a complete trade breakdown:

It’s not a 100% guarantee that BMR will push to new highs. Nothing is when it comes to the stock market.

But in my 15 years of trading, one of the main things I’ve learned is that volatile stocks can follow popular patterns.

We’re not certain BMR will break out.

But if it does, there are patterns we can use to trade the price action.

#2: SoundHound AI Inc (NASDAQ: SOUN) — The Former Runner With NVIDIA News

My second stock pick is SoundHound AI Inc (NASDAQ: SOUN).

This is a HUGE former runner from 2023 when the AI boom began.

The company works in “conversational intelligence”. Its service helps business people communicate if there are language barriers.

The price spiked 410% in 2023.

Now, a lot of trashy penny stocks spike hundreds of percentage points. But then they come crashing down. That’s what SOUN’s chart looked like … 

It’s possible for the price to rally and push to new all-time highs. But it takes a big catalyst with a lot of trading volume to push through all the bagholders sitting at the highs.

On February 15 it was announced that NVIDIA Corporation (NASDAQ: NVDA) bought a stake in SOUN. Remember, NVDA is the star of the U.S. stock market this year.

Share prices spiked 90% since the news came out. And the stock shot toward 52-week highs.

Keep an eye on this former AI spiker that just woke up … 

#3: Nano-X Imaging Ltd (NASDAQ: NNOX) — Yet Another NVIDIA Catalyst AI Stock

My third stock pick is Nano-X Imaging Ltd (NASDAQ: NNOX).

SOUN wasn’t the only tech stock NVDA took an interest in.

Arm Holdings Plc (NASDAQ: ARM) was another name that got some love. But share prices were already trading above $50 in early February. That’s out of range for most small-account traders.

That’s why we focus on SOUN and NNOX.

NNOX share prices spiked 120% as a result of the NVDA-stake news.

52-week highs are at $22. The stock is still far away from that level.

But the price is consolidating under recent highs right now. And we could build a position around that breakout possibility.

The recent highs are $14. I’d wait for it to push back toward that level and then find some support to bounce off of.

If the price never pushes toward a breakout, that’s fine. If that’s the case, we move on to the next play.

Don’t get hung up on a stock that doesn’t follow your trade pattern.

That’s a recipe for disaster.

The market will always be here, and this is a marathon, not a sprint.

Focus on the bigger picture.

#4: Intuitive Machines, Inc. (NASDAQ: LUNR) — The Moon Landing Moonshot Stock

My fourth stock pick is Intuitive Machines, Inc. (NASDAQ: LUNR).

This is a REAL space play, shockingly.

Most penny stocks are trash companies that don’t actually do anything.

But when Elon Musk is involved … You know something’s going down. Or in this case: Up.

The company’s Nova-C class lunar lander launched into orbit from NASA’s Kennedy Space Center in Florida at 1:05 A.M. Eastern, Thursday, February 15. It was attached to SpaceX’s Falcon 9 rocket. Musk is CEO of SpaceX.

So far … the mission is successful.

And LUNR share prices spiked 230%.

StocksToTrade Breaking News alerted the February 20 move at 8:27 A.M. Eastern:

There are real rockets taking off right now!

Quit messing around and get on board.

#5: MicroCloud Hologram Inc (NASDAQ: HOLO) — The Parabolic Short Squeeze That I’m Watching for a Dip and Rip

My fifth stock pick is MicroCloud Hologram Inc (NASDAQ: HOLO).

The most legendary short squeeze of 2024 … Thus far.

Prices launched 6,400% after the company announced it was joining the Communications Industry Association on February 7.

That means absolutely nothing, haha!

Short sellers piled in and tried to ride the initially weak premarket spike lower, but the short selling strategy is overcrowded right now. Too many shorts were scrambling for shares and profits.

When a few started to exit (buy to cover), the bullish momentum ignited a powder keg. Short sellers blew up all day long.

And when the price broke out to $98 on February 16, short sellers blew up again.

I’m not waiting for the price to spike to new highs … Even though theoretically it could.

Instead, I’m looking for a morning dip and resulting intraday rip. The pattern is called a dip and rip. There’s a tutorial video below:

Don’t try to play these runners without a pattern!

Otherwise you’re just gambling. And gamblers get eaten alive out here.

Benefits of Diving Into Penny Stocks

Exploring penny stocks can be particularly rewarding for those who take the time to understand the market’s nuances. These investments often present unique opportunities not found in more established sectors, including access to emerging companies that could become tomorrow’s market leaders. For traders willing to navigate the risks, penny stocks can diversify a portfolio and offer significant upside potential.

In the fast-paced world of penny stock trading, having the right tools at your disposal can make a significant difference. The best apps for penny stock trading offer real-time data, advanced charting tools, and quick execution to help you capitalize on market opportunities. These apps are designed to enhance your trading strategy, providing you with the insights and agility needed to make informed decisions swiftly. Whether you’re a seasoned trader or just starting out, selecting an app that suits your trading style is crucial. For a guide to the top apps tailored for penny stock traders, explore the best apps for penny stocks.

Risks of Investing in Penny Stocks

The same factors that make penny stocks attractive also contribute to their risk. High volatility, limited liquidity, and less regulatory oversight mean that investors must tread carefully, keeping in mind that the possibility of significant losses is as real as the potential for considerable gains.

Understanding the dynamics of high volume penny stocks is essential for navigating the risks associated with these investments. High trading volume can indicate strong interest in a stock, potentially leading to significant price movements. However, it also increases the risk of volatility. Traders must be adept at reading market signals and managing their risk exposure to thrive in this environment. High volume penny stocks can offer rewarding opportunities, but only to those who are prepared to face the challenges head-on. For insights into managing the risks and opportunities presented by these stocks, check out our article on high volume penny stocks.

How to Find the Best Penny Stocks to Trade

Identifying promising penny stocks requires a combination of technical analysis, meticulous research, and staying informed through reliable sources such as penny stock newsletters and updates from financial news outlets. Traders should focus on companies with solid fundamentals, transparent management practices, and clear growth strategies.

Crafting a robust penny stocks strategy is pivotal for anyone looking to trade these high-risk, high-reward assets successfully. A well-thought-out strategy takes into account market analysis, risk management, and the trader’s personal goals. It involves selecting stocks based on solid fundamentals, technical analysis, and market sentiment. Additionally, a good strategy includes clear entry and exit points, ensuring traders can maximize gains while minimizing losses. To develop a comprehensive approach to trading penny stocks, including tips on analysis and risk management, dive into penny stocks strategy.

You’ll need a good stock screener. When it comes to stock screeners, StocksToTrade is first on my list. It’s a powerful trading platform that integrates with most major brokers.

I use StocksToTrade to scan for news, tweets, earning reports, and more — all covered in its powerful news scanner. 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!

Tips for Trading Penny Stocks

Successful penny stock trading hinges on setting clear trading goals, understanding your risk tolerance, and employing strategies to minimize exposure. Utilizing stop-loss orders, diversifying across different sectors, and continuously monitoring your positions can help manage the inherent risks of these investments.

Always trade with a plan.

Before diving into penny stock trading, it’s crucial to understand the fundamentals of these speculative investments. Penny stocks are known for their low price and high volatility, offering the potential for significant returns alongside substantial risks. Traders should focus on companies with strong growth potential, transparent financials, and a solid business model. Educating yourself on the intricacies of penny stocks can provide a strong foundation for making informed trading decisions. For a comprehensive overview of penny stocks, including how to identify promising opportunities, visit our comprehensive guide to penny stocks.

Key Takeaways

  • Penny stocks offer a high-reward potential but come with increased risk.
  • Thorough research and a strategic approach are crucial for success in penny stock trading.
  • Understanding market trends, company fundamentals, and technical indicators can aid in identifying promising opportunities.

There are a ton of ways to build day trading careers… But all of them start with the basics.

Before you even think about becoming profitable, you’ll need to build a solid foundation. That’s what I help my students do every day — scanning the market, outlining trading plans, and answering any questions that come up.

You can check out the NO-COST webinar here for a closer look at how profitable traders go about preparing for the trading day!

What stocks are YOU watching? Write “I won’t trade without a plan” in the comments if my advice has taken hold!

Frequently Asked Questions

What Happens After Investing in Penny Stocks?

Investing in penny stocks requires ongoing vigilance. Market conditions can change rapidly, affecting the value of these investments. Traders should be prepared to act quickly to protect their capital and capture profits.

How High Can Penny Stocks Realistically Go?

The growth potential of penny stocks varies widely. While some may see dramatic increases in value, others may not perform as well. Success in penny stock investing often depends on identifying undervalued companies poised for growth.

What Are Common Mistakes To Avoid in Penny Stock Trading?

Common pitfalls include failing to conduct adequate research, over-investing in a single stock, and letting emotions drive trading decisions. Developing a disciplined trading strategy and adhering to it can help mitigate these risks.

What Are the Basics Every Beginner Should Know About Penny Stocks?

When exploring penny stocks, beginners should understand the importance of researching value stocks and trading stocks with potential for growth. Money management is crucial due to the volatility and lack of liquidity often associated with penny stocks. Information on dividends and significant corporate events can offer insights into a company’s health and future moves. The Dow Jones index, while not directly related to penny stocks, provides a broader market context that can influence investor sentiment and market trends.

How Can Beginners Find Reliable Penny Stocks Lists?

For beginners looking for top penny stocks lists, several keys to finding reliable sources include checking for ETFs that might include speculative stocks, trades history, and events affecting sectors represented in the lists. Always consider the basis on which stocks are included, such as growth potential or recent moves. Websites and pages dedicated to financial markets usually have sections or links to penny stocks lists, often with a disclaimer to advise on the inherent risks.

What Role Does Online Information Play in Penny Stock Trading?

Online information is vital for successful penny stock trading, offering access to real-time events, updates, and analysis. Symbols and closing prices provide immediate data for making informed decisions. Platforms like Nikola Corporation represent specific investment opportunities but come with their claims and market reactions to consider. A dashboard feature on trading platforms can help manage and monitor these investments effectively, showing cash positions, potential dividends, and the impact of market moves, including on indices like the Dow Jones.

How Do Legal and Financial Notices Affect Penny Stock Investments?

Legal and financial notices, including disclaimers and rights associated with penny stock investments, are critical for beginners to understand. They outline the risks and legalities of trading, especially in volatile markets where claims can lead to significant financial consequences. Additionally, understanding the significance of a $300 million cash position in a company or ETFs can guide investment strategies. Canadian markets or specific sectors may have unique notices or links to key information that traders should follow, ensuring compliance and informed decision-making.