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Mar. 8, 202422 min read

Top Biotech Penny Stocks to Watch Out for in March 2024

Tim BohenAvatar
Written by Tim Bohen

Biotech penny stocks are low-priced shares in small pharma and drug development and treatment companies. It’s normal for a biotech penny stock to spike after good study results or drug pipeline news. But this volatility cuts both ways — these sketchy stocks often dilute their float to raise cash, hurting their share value in the process.

Table of Contents

Top Biotech Penny Stock Picks

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

Stock Ticker Company Performance (YTD)
NASDAQ: OCEA Ocean Biomedical Inc + 758.06%
NASDAQ: LIFW MSP Recovery Inc – 54.31%
NYSE: EBS Emergent Biosolutions Inc + 5.79%
NASDAQ: VTYX Ventyx Biosciences Inc + 342.17%
NASDAQ: TIVC Tivic Health Systems Inc – 27.07%

The biotech 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 biotech penny stocks!

What Are Biotech Penny Stocks?

Biotech penny stocks are low-priced shares of small biotech companies. They operate in the biotech sector, focusing on developing therapies, drugs, and treatments for various medical conditions.

They’re not your typical blue-chip stocks; they’re more like the wild west of the stock market. But if you’re up for the challenge, they can offer some serious upside.

How Do Biotech Penny Stocks Work?

News plays a significant role in the success or failure of a biotech stock. When a biotech company releases positive trial results or gains FDA approval, its stock can soar. But remember, these stocks are volatile. One piece of bad news — or equally likely, a new share offering — can send them plummeting.

Benefits of Investing in Biotech Penny Stocks

Investing in biotech penny stocks can be a rollercoaster, but it’s one that can pay off big. I’ve seen some of my students make substantial returns in this sector. But like any investment, it comes with risks and rewards.

Potential for Higher Returns

The potential for high returns is one of the most attractive aspects of biotech penny stocks. When a small biotech company makes a breakthrough, its share prices can skyrocket. But keep in mind, the opposite is also true. High rewards come with high risks.

Innovative Breakthroughs

Biotech companies are at the forefront of medical innovation. From cancer treatments to vaccines, they’re working on solving some of the world’s most pressing health issues. Investing in these companies gives you a chance to be part of something bigger.

 

Market Volatility Opportunities

The biotech sector is known for its volatility. For traders like me who thrive on quick moves, this is where the action is. But remember, volatility cuts both ways. You can make money fast, but you can lose it just as quickly.

Diversification

Adding biotech penny stocks to your portfolio can offer diversification. But don’t go all-in; these should only be a small part of a well-rounded investment strategy.

It makes sense to check out other sectors — like the emergent sector of penny stocks that Robinhood traders are locked in on. Robinhood has gained popularity for its user-friendly interface and zero-commission trades. However, its user-friendly approach has led to many traders treating it like a video game. These traders sometimes converge on the hottest Robinhood penny stocks — and when they do, these stocks can really take off.

Biotech Investing for Beginners

If you’re new to the world of biotech investing, start with research. Look into companies, read up on their pipelines, and understand the risks involved. And don’t forget to use the right trading tools. I’ve been teaching beginners how to navigate this complex sector, and the right tools can make all the difference.

5 Biotech Penny Stocks to Watch in March 2024

My top 5 biotech penny stocks to watch for March 2024 are:

  • NASDAQ: OCEA — Ocean Biomedical Inc — The Former Runner on Short Squeeze Watch
  • NASDAQ: LIFW — MSP Recovery Inc — The Oracle Breakout Watch Biotech Stock 
  • NYSE: EBS — Emergent Biosolutions Inc — The StocksToTrade Advisory Watchlist Multi-Week Runner 
  • NASDAQ: VTYX — Ventyx Biosciences Inc — The Weight Loss Hot Sector Biotech Stock
  • NASDAQ: TIVC — Tivic Health Systems Inc — The Low-Float Spiker With No Catalyst

Don’t get too excited – biotech stocks are NOTORIOUS for diluting immediately after their runs …

There is no such thing as a sure thing. That goes double for the biotech sector.

These aren’t stock “picks.” They’re stocks I’m watching to see if they fit my patterns.

That’s what trading is. Don’t burn yourself out on low-potential plays. Be safe, and wait for the truly Grade-A setups …

There’s no guarantee that any of my watchlist picks will be tradeable. But if something happens, smart traders should be ready.

Here’s some background info on biotech penny stocks:

  • What is the most promising biotech penny stock?

A stock with a lot of volatility like Ocean Biomedical Inc (NASDAQ: OCEA) is a good bet for the most promising biotech penny stock. Remember, we’re traders, not investors. We’re watching the stocks on this list for short-term moves, not predicting which of these stocks will still be around in 2030.

  • What are the top 3 biotech penny stocks to buy now?

My top 3 biotech penny stocks to buy now (as long as their price action is strong) are Ocean Biomedical Inc (NASDAQ: OCEA), Ventyx Biosciences Inc (NASDAQ: VTYX), and Emergent Biosolutions Inc (NYSE: EBS).

  • Which biotech penny stocks have a “Strong Buy” analyst rating?

Analysts don’t give any biotech penny stocks “strong buy” ratings. These stocks are sketchy and unstable, and should never be investment targets. Always trade with a plan.

Now, let’s get to the top biotech penny stocks to watch this month!

Best Biotech Penny Stocks for March 2024

These are the top 5 biotech penny stocks to watch in March 2024 …

No, that doesn’t mean that I’ll trade them. Learn the patterns that work best for you — you might see a chance to use them with these stocks!

#1: Ocean Biomedical Inc (NASDAQ: OCEA) — The Former Runner on Short Squeeze Watch

My first biotech stock pick is Ocean Biomedical Inc (NASDAQ: OCEA).

Past spikers can spike again.

OCEA ran 690% in February 2023.

It spiked again in February 2024, and the run is pushing into March.

This is purely a biotech sympathy play. The biotech sector is red hot right now. Second only to the AI and tech sector.

On February 29 the company announced plans to present its “first-ever human data” at the 2024 APASL Global Liver Meeting set for March 27–31.

Don’t hold shares through the meeting.

There’s a trading rule that we follow that goes like this: buy the rumor, sell the news.

When there’s a publicized event in the future, we can see a stock trade with more volatility in anticipation.

But if there’s too much bullish momentum, when the event comes to pass, it’s possible that everyone who would have bought already did. Then there are only sellers left and the price tanks.

We can trade the volatility before and after the event. But don’t hold a position during the event.

OCEA already spiked to new highs in anticipation of the meeting, a 1,300% run. And technically, it could spike higher … 

According to my StocksToTrade app, OCEA has a float of only 3.1 million shares. The low supply of shares (anything below 10 million) can help prices spike higher when demand increases.

It can also help squeeze short sellers. And since this crappy stock already spiked 1,300%, there are definitely greedy shorts trying to ride the price action lower.

Remember, they have the correct thesis. OCEA doesn’t deserve to spike this much… 

But there’s no telling how high it could squeeze before it craps out.

#2: MSP Recovery Inc (NASDAQ: LIFW) — The Oracle Breakout Watch Biotech Stock 

My second biotech stock pick is MSP Recovery Inc (NASDAQ: LIFW).

There are a lot of former spikers on this list.

It’s one of the things we look for when trading a stock. If it spiked before, it can spike again.

And LIFW has a great history of spiking:

LIFW chart multi-month, 1-day candles Source: StocksToTrade

It’s a happy coincidence that the spikes are the same percentages.

Patterns can repeat in the stock market, but don’t expect the next spike to be exactly 620%. The history of spiking is just a good confirmation of probable volatility.

But, we CAN use past price action to trade future spikes.

The price action shows us areas of support and resistance. They’re essential tools for traders. 

These levels represent a large collection of buyers and sellers. It’s a place the price might bounce off of or violently break through. And StocksToTrade’s Oracle tool is programmed to automatically identify these levels.

LIFW woke up at the beginning of March and spiked 60%.

The stock is trading near the lows right now. But if it can push up through some of the resistance levels we can start to build a position. It needs to work toward $1.20.

Take a look at the Oracle levels below:

LIFW chart multi-day, 10-minute candles Source: StocksToTrade

The traders with the best tools are in the best position to succeed.

Try StocksToTrade today!

It even alerts me if the price trades above a certain level.

#3: Emergent Biosolutions Inc (NYSE: EBS) — The StocksToTrade Advisory Watchlist Multi-Week Runner 

My third biotech stock pick is Emergent Biosolutions Inc (NYSE: EBS).

I included this stock on a February 21 watchlist.

And look what happened since then:

EBS chart multi-day, 30-minute candles Source: StocksToTrade

The company announced the appointment of “industry leader” Joseph C. Papa as the new CEO.

Papa is a businessman with an impressive history as a biotech CEO. His company Bausch + Lomb Corp (NYSE: BLCO) IPO’d in 2022 and is currently trading above $15.

It’s not a blue chip stock by any means. But it’s not a penny stock either.

The face of a seasoned vet leading a stock like EBS is a good sign for share prices. It’s possible this run continues.

#4: Ventyx Biosciences Inc (NASDAQ: VTYX) — The Weight Loss Hot Sector Biotech Stock

My fourth biotech stock pick is Ventyx Biosciences Inc (NASDAQ: VTYX).

We have to talk about a quick safety aspect to keep in mind when trading these biotech stocks.

They can spike 100% intraday, but there’s a dark side to this price action … 

Biotech stocks are notorious for diluting after a stock spike. Essentially, it’s a corporate cash grab that tanks the share price.

So, when we’re trading biotech stocks, we’re always wary of holding overnight or for long periods of time.

Don’t let that scare you … now you know!

I’m interested in VTYX because it’s unlikely the company will dilute the share price any time soon. Here’s why … 

As of September 2023, the company boasted $300 million in cash and equivalents and had no debt.

The stock spiked 280% starting February 20. That’s when investment bank Piper Sandler said that VTYX’s treatment could rival that of other obesity treatments in the industry.

There are a few weight loss plays moving in the market right now. But VTYX is my favorite right now due to the low price and the endurance of this run:

VTYX chart multi-day, 30-minute candles Source: StocksToTrade

I want to see the price dip and consolidate above support before I build a position.

No need to buy at the highs. Don’t stress yourself out like that.

We always use proper risk and reward while trading.

That’s how traders protect their overall accounts.

#5: Tivic Health Systems Inc (NASDAQ: TIVC) — The Low-Float Spiker With No Catalyst

My fifth biotech stock pick is Tivic Health Systems Inc (NASDAQ: TIVC).

In this 2024 market, we’re seeing stocks spike 100% without any catalysts at all.

TIVC is in a hot sector because it’s a biotech stock. And it’s prone to volatility because the float is 1.3 million shares.

But when the price launched 75% on February 29 and traded 4.5 million shares of volume, there wasn’t any news pushing prices higher.

Usually we don’t trade stocks that don’t have catalysts. But this 2024 market is different.

If we respect the price action and stay disciplined, we can build positions on stocks like TIVC.

But make sure it’s in a hot sector and it has a low float.

It also helps if it has a history of spiking. We’re not firing at random here.

Always trade with a plan. And cut any losses quickly.

Biotech Stocks Under $5

The allure of hot sector stocks, especially when they’re also penny stocks, is undeniable. These stocks present a unique blend of opportunity and volatility. The biotech industry is booming, with advancements and applications spreading across various sectors, from drug development to gene editing, making biotech stocks a magnet for investors looking for the next big breakthrough. The gains here can be proportionately greater than those from more established stocks, mainly because even minor positive developments or clinical trial results can send their prices soaring.

However, it’s crucial to approach these opportunities with a clear strategy and an understanding of the risks involved. The volatility of penny stocks, combined with the speculative nature of biotech ventures, means that while the potential for rapid gains is significant, the risk of losses is equally high. Conduct thorough research, looking beyond the hype. And never invest in these stocks — only trade them.

Remember, the key to success in trading biotech stocks under $5 is not just about jumping on every opportunity but being selective and strategic. It’s about leveraging the explosive potential of the biotech sector while managing risk meticulously. By focusing on companies with the potential to lead in their niche, traders can capitalize on the disproportionate gains that these penny stocks offer, all while keeping their investment strategy tight and cutting losses quickly.

Upcoming Biotech Companies

Keep an eye on the news for upcoming biotech companies. These are often the ones that have the most potential for high returns. But be cautious; not every new biotech company will be a winner. Always do your due diligence before adding any stock to your watchlist.

It’s also a good idea to keep tabs on the overall market. Monitoring the market isn’t just about checking prices; it’s about understanding trends and identifying potential breakout stocks. This proactive approach can give you a leg up in making profitable trades. If you’re looking for a curated list to help you get started, check out these stocks to watch.

Risks of Investing in Biotech Penny Stocks

Investing in biotech penny stocks is not without its risks. I’ve had my share of losses in this sector, and it’s crucial to understand what you’re getting into.

Higher Failure Rates

Biotech companies often have higher failure rates, especially when it comes to clinical trials. If a drug doesn’t get the approval or shows poor trial results, share prices can tank.

Regulatory Uncertainties

The biotech sector is heavily regulated. Companies need to go through multiple phases of clinical trials before they can bring a product to market. Any hiccup in this process can be disastrous for the stock price.

Limited Financial Resources

Many biotech penny stocks have limited financial resources. They’re often dependent on investor funding, and if the money dries up, the company can go under.

Top Tips for Buying Biotech Penny Stocks

When it comes to biotech penny stocks, you’ve got to be on your A-game. You need to analyze everything from clinical trial results to market cap. But it’s not just about numbers and data; it’s also about people. Understand the management team behind the company and their track record.

Let’s talk platforms. You need a reliable trading platform that gives you quick access to the market. Your account should offer robust securities to protect your investment. And speaking of investments, always consider the value of the stock against its potential growth and revenue. Don’t just listen to brokers who might be pushing their own picks.

Patients are the end-users of biotech products, so pay attention to patient response during clinical trials. This could be a good indicator of the stock’s future value. But remember, you’re not a medical expert. Always read the disclaimer before making any moves.

In the biotech world, every cell counts, literally. Sales growth can be a good indicator, but it’s not everything. Look at the overall revenue and how it’s trending.

Lastly, don’t underestimate the power of a ticker symbol. It’s more than just an identifier; it’s a quick way to access a wealth of information about a company. So, do your due diligence and make informed decisions.

Research the Company

Before you invest in any biotech penny stock, research the company. Look at their pipeline, check their financials, and read up on their management team. The more information you have, the better your chances of making a profitable trade.

Understand How You Are Going to Trade

Are you looking for quick gains, or are you in it for the long haul? Understanding your trading strategy will help you pick the right stocks.

Look into the Biotech Industry

Understanding the biotech industry as a whole will give you a better perspective on individual stocks. Keep an eye on market trends, breakthrough therapies, and upcoming IPOs.

Never Believe in OTC/Pink Sheet-Listed Penny Stocks

Over-the-counter (OTC) and pink sheet stocks are not subject to the same regulatory oversight as stocks listed on major exchanges. They’re riskier and more susceptible to manipulation.

Trade Promotional Pumps Carefully

Be wary of stocks that are being heavily promoted in the media or online forums. These are often pump-and-dump schemes designed to inflate the stock price.

Only Trade Penny Stocks with Volume

Look for stocks with high trading volume. Low volume stocks are more susceptible to price manipulation.

Understand the Hit and Run Approach

In the world of biotech penny stocks, it’s often better to be a trader than an investor. Take your profits and move on to the next opportunity.

How To Make Money in Biotech Stocks

The key to making money in biotech stocks is research, timing, and a solid trading plan. I’ve been trading these stocks for years, and while they’re risky, they offer some of the best opportunities for high returns. But remember, always trade with money you can afford to lose.

Once you’ve gained some experience, you might start thinking about day trading as more than just a hobby. It’s a significant step, requiring a different level of commitment and strategy. If you’re considering this path, you’ll need to understand the nuances that come with making day trading your primary income source. For a comprehensive guide on how to make this transition, here’s how to day trade for a living.

See the Stocks I’m Watching

This is a sector-specific watchlist. I put a few of these together each month.

But it’s even more important to keep an eye on general movers and shakers. Every week I put together a list of the hottest stocks in the market, regardless of sector.

And I include a detailed analysis of each pick. That way you can follow my thought process and learn to pick stocks yourself.

Sign up for my NO-COST weekly watchlist here!

Conclusion

Penny stock trading is a great way to build your account as a new trader. Biotech penny stocks are some of the hottest movers on the market — but this volatility can cut both ways.

The right catalyst can supercharge stock runs. That’s great news for prepared traders. But you have to know what to watch … like trial results or FDA approvals.

Key Considerations:

  • A lot of biotech penny stocks are shady. Risk in biotech penny stocks can be heightened due to limited company information and unsavory promotion. When the price gets up high enough, nine times out of 10 these companies will do new share offerings, tanking share price.
  • There’s a possibility for big gains. I trade biotech penny stocks because they can go for big gains. A disciplined trading plan can cut down on risk while capturing some of those gains.
  • These companies are often young. Some biotech penny stocks are newer companies, and can dramatically shift their market trajectory and valuation.

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!

Have you traded biotech penny stocks? Write “I always trade with a plan” in the comments!

FAQs

How Do I Invest in Biotech Stocks?

Investing in biotech stocks starts with research. Look for companies with promising pipelines, strong financials, and experienced management teams.

Why Do Investors Buy Penny Stocks?

Investors buy penny stocks for the potential of high returns. These low-priced stocks offer an opportunity for significant profits, but they come with higher risks.

How To Avoid Penny Stock Risk?

The best way to avoid penny stock risk is through research and due diligence. Understand the company you’re investing in, the risks involved, and have a clear trading strategy.