5 Top Stocks to Watch in May 2020

As the volatile markets rage on, everyone wants to know … what are the top stocks to watch in May 2020?

Wow … saying April 2020 was full of changes would be a huge understatement. The market continued to make historic moves last month. Most of the world’s been in lockdown due to the COVID-19 pandemic. We’ve all been forced to adjust to a new lifestyle … at least for now.

Entire industries are tanking — especially crude oil. With cruise lines and airlines shutting down and fewer people on the road, oil supply is up and demand has plummeted. That’s caused oil prices to crash to all-time lows. Oil futures went negative for the first time in history!

None of us have been in a market quite like this before. So we’re all just watching the price action. The SPDR S&P 500 (NYSE: SPY) continued to grind up in April. That’s even with massive numbers of businesses shutting down and record-breaking numbers of unemployment.

If you’re gonna trade in this market where fundamentals don’t seem to matter, technical analysis is more important than ever.

We’re entering a new earnings season … It’ll be interesting to see how the market reacts. Truth is, the numbers that will reflect the pandemic impact won’t come out until next earnings season. But companies are so unsure of their futures that a lot of them aren’t even giving guidance this time.

As bad as all that is, there are still a lot of trading opportunities out there. We’re just gonna have to do our research and be prepared.

(If you want to get my WEEKLY watchlists for no cost, sign up here.)

Now, let’s take a look at my 5 top stocks to watch in May 2020.

5 Stocks to Watch in May 2020

Teladoc Health, Inc. (NYSE: TDOC)

First is TDOC. This stock made headlines a few weeks ago after President Trump mentioned telehealth in a daily briefing and its part in combatting the coronavirus. It gapped up 19% after that.

Personally, I’m a big believer in these online medical solutions … especially during the pandemic. It’s a smart way for doctors to see patients more effectively. And people won’t have to leave their homes and risk exposure. Also, it can help prevent hospitals from being overrun so they can better handle more serious cases.

TDOC has a nice chart and a good story so I’ll watch for any setups in May.

DocuSign Inc. (NASDAQ: DOCU)

DOCU is another company that just makes sense. This company basically does online documents, and it’s a great solution during the pandemic.

Quick side story … I’ve been working on buying another investment property, and the COVID-19 guidelines have made things challenging. Although restrictions are loosening, my agent told me that they were doing closings in parking lots and rolling the car window down slightly to pass paperwork back and forth to one another.

They even threw the pens away after everything was signed.

DOCU would have made things so much easier. Even without the pandemic, it’s frustrating to print stacks of paperwork, sign everything, and then scan it all again before sending it back. Some companies are so behind they still use fax machines! Who has access to a fax machine anymore?

I think it’s only a matter of time before everyone catches on and uses solutions like DOCU. It has a nice chart, and I’ll be watching it this month.

Inovio Pharmaceuticals, Inc. (NASDAQ: INO)

INO has been my favorite virus play for a while now.

It had a hell of a move these past few weeks, going into full squeeze mode. It’s held up really well.

If we go back to before the start of the pandemic, this was just a $2 stock. It spiked to $19.36 in early March on news of a possible COVID-19 vaccine solution. Then it stabilized around $8. Now it looks like it might break out again.

I’ll definitely watch INO in May.

Switch, Inc. (NYSE: SWCH)

Another “no-brainer” solution is SWCH. It provides data centers to companies that do business on the internet. Everything was already moving toward the cloud, and the pandemic is pushing us to get there faster.

I mean, check out this article. Universal Pictures experimented with releasing the “Trolls World Tour” movie on demand while everyone was on lockdown. It was so lucrative that Universal may release other titles on demand on the regular. The world is changing, folks.

SWCH has been grinding up since the beginning of March and is now at 52-week highs.

On a personal note, I fly over Switch’s data center in Grand Rapids often (when the world’s not on lockdown). It’s this cool pyramid structure that sat deserted for a long time. Now it’s got a sleek, eco-friendly update. Check it out on the company website.

AngloGold Ashanti Limited (NYSE: AU)

Last but not least, we’ve got AU. With the government dumping trillions of dollars into the market, people are concerned about inflation. So a lot of people are looking to buy gold right now.

A lot of gold stocks are breaking out. But I’m watching AU because it’s leading the sector in volume. The Fed will make more announcements soon, so watch for AU movements in May.

That’s a wrap on my 5 top stocks to watch in May 2020.

Remember, although we’re in uncharted waters, there’s still a lot of opportunity for traders who prepare. While some stocks are tanking, others are thriving. Please, do your research and be careful.

Now, here are some tips to help you add your own stock picks to your watchlists and trade smart.

How Can You Trade Stocks?

Brand new to trading? Start with your education. This post is a good place to start.

It’s easier than ever to start trading. All you really need is a decent laptop, solid Wi-Fi, and a trading account. But don’t be fooled into thinking trading is easy…

Most traders lose. If it were easy, everyone would quit their jobs and do it.

Most newbie traders just jump in. The smart way to set yourself apart is to focus on your education. Try different strategies to find what works. Test with paper trading.

Track every trade in a journal and go back often and review what’s working and what’s not…

Joining a program like StocksToTrade Pro can make things A LOT easier. That’s our trading education community. You get mentorship, webinar lessons, and many more resources. We focus on how to trade through any kind of market.

Here are 5 tips on how to trade smart and pick the top stocks to watch…

5 Tips on How to Pick the Top Stocks to Watch

#1: Look for Big Movers

When I start building my watchlists, I always look for big percent gainers. I want to find stocks that are already moving.

I always harp about the benefits of getting up early. If you’re part of StocksToTrade Pro, you’ve seen how it helps me prepare for the market open. Doing research after trading hours is also helpful. Some stocks start to move after 4 p.m.

No big surprise here, but for my scanning software, I use StocksToTrade. It has a bunch of built-in scans that are specifically designed to find stocks that fit the strategies I teach.

If you’re more hands-on, you can create your own custom scans. And if you’re a newbie, don’t worry … There’s a ton of help to get you up to speed. Keep an eye on this blog and follow StocksToTrade on YouTube. We post fresh content all the time.

And of course, there’s the SteadyTrade podcast. Traders of all levels can learn something here, and we have an awesome time every week. Tune in!

#2: Watch for Catalysts

Once I find the top moving stocks, I wanna find out why they’re moving. If there isn’t a good reason, the momentum will probably fizzle out. So you gotta find those catalysts.

Did the company announce good earnings? Did it win a new government contract? Was there a company merger?

A lot of things can move a stock. And the stronger the news catalyst, the more powerful the stock movement can be.

Some sectors even have specialized news catalysts. For example, biotechs could get FDA approval for a new drug … or complete a phase of a major study. This is why you gotta do your homework.

Watch this video to learn more about catalysts:

#3: Study the Charts

You gotta learn to read charts and spot patterns. And when you look for top stocks to watch, don’t just look at one time frame.

Change it up. Look at 1-minute, 5-minute, 15-minute, and daily charts. Each time frame can tell you a different part of the stock’s story.

Is it at all-time highs? Is it stuck in a particular range?

Look for areas of support and resistance. This can help you see where it’s difficult for the price to break through. It’s a smart way to set your entries and exits. And it can prevent you from entering trades that have little chance of moving.

With StocksToTrade, you can use the news feature to see which catalysts caused certain moves on longer-term charts. You can then compare the movements of similar catalysts to help you make better trading decisions.

#4: Stay Away From Illiquid Stocks

Another important thing when finding the top stocks to watch is trading volume.

So you need big movers with great news catalysts … And you also need to make sure the stocks are liquid enough to trade.

Big volume ensures there are enough traders buying and selling so that you can enter and exit the trade easily. Also, the more volume the stock has, the more powerful the moves can be.

After I find the big percent gainers that have good news catalysts, I make sure there’s enough volume before I even consider trading them.

#5: Check Social Media

You wanna know what other traders are watching? Social media can be a good tool for that.

You can figure out what a lot of traders are thinking from their tweets and posts…

StocksToTrade makes it even easier to follow the buzz on stocks you’re watching with a built-in Twitter scanner that you can customize. Try StocksToTrade for 14 days — it’s just $7. See for yourself just how useful this little tool can be!

Common Trading and Low-Priced Stock Questions

A lot of people look at the market and see money. There are definitely opportunities in low-priced and penny stocks. But you gotta learn strategies and how the market works.

So let’s tackle a few common questions now…

Is Trading Low-Priced Stocks Risky?

Yes, trading is risky. There’s no such thing as a risk-free trade or investment. Ever.

That’s why you have to study.

You gotta learn patterns, rules, and strategies to make smart trading decisions. I’ve spent years working on my own education. Even when I ran my IT business, I woke up early to study. I traded at my office. I put in the work.

Now I use my experience to help StocksToTrade Pro students improve.

Start with your education. Start trading with small positions. Paper trade to gain some experience.

That’s part of how you learn to manage your risk. And you gotta learn how to lose. Losing is part of the process.

But you can lose 60% of the time and still grow your account. You have to learn to respect the risks and cut your losses. You have to make smart trades and do your research.

Are you willing to put in the time and effort to learn? Are you committed to seeing the learning process through? If so, I’d love to help at StocksToTrade Pro. Join us today!

Is Short Selling Really That Risky?

No doubt, short selling is risky.

It requires a lot of skill to do it right. And there are a lot of newbie traders just following “gurus” blindly and blowing up their accounts.

A lot of the big price moves we see today can be because ignorant short sellers are getting squeezed out of their trades…

Some traders have the discipline and experience to do it well. But it’s not a matter of shorting any penny stock that’s up.

And you can lose more than what’s in your account if you short sell. You have to tread carefully here. Don’t believe anyone who says shorting is easy. Like any other strategy, do your homework before you try it.

How Much Money Do I Need to Start Trading?

In reality, it doesn’t take a lot to start trading. You can even paper trade the first few months if you can’t fund an account yet.

If you’re ready to fund an account, some brokers require minimums. Check out this post for tips on choosing a broker.

If you’re serious about trading, prepare. Give yourself a better chance for success by building your knowledge and skill level.

All the successful traders I know put in the time and work. Realize that trading isn’t easy. The market is a battlefield where you can lose real money — fast.

Want to speed up your learning curve? Join me and a community of like-minded traders at StocksToTrade Pro. You don’t have to go it alone.

Conclusion

Your watchlist is everything when it comes to trading. So start working today to build solid watchlists. Find what works for you. Learn to adapt to any market.

These monthly top stock lists can help you understand what I see happening in the markets … But I love seeing students build up the skills to make their own and trade smarter every day.

I hope you use this list of top stocks to watch in May 2020 to help you create your own lists.

The best way to learn is to try. Follow the tips above — and don’t worry about being perfect.

Do the work, make mistakes, and learn from them. If the stocks you watch don’t play out like you thought, find out why. Keep a trading journal. This can help you improve and craft better trading plans.

This list of stocks to watch is NOT a recommendation to buy … It’s a guide to help learn to spot those big movers and hot opportunities. That’s what we’re all about in the StocksToTrade Pro community. Come join us today!

What do you think about trading stocks in May 2020? Comment below, I love to hear from all my readers!