What’s one of the top technical indicators traders use to buy penny stocks? Some will use things like relative strength. Others may use Fibonacci retracement levels. But one indicator almost all traders use is volume. This is one of the most important things to monitor when it comes to the stock market today. If you don’t have volume in stocks, you don’t have much of a market to buy and sell from. One might say that volume is the life-blood of the market.
There’s no doubt that small-caps are experiencing a massive uptick in action this month. In fact, almost daily, we see the most active list of stocks includes a majority of penny stocks. If you were reading some of our articles on Wednesday, we talked about this topic. Of the top 10 most active NYSE and Nasdaq stocks, 8 were stocks under $5. Furthermore, when we looked at some of the highest volume stocks across all markets, 3 of the OTC penny stocks had amassed over 2 billion shares alone.
[Read More] What Does Volume Mean In Penny Stocks?
While is volume important in penny stocks? It all has to do with actually trading. If you have a stock you like, but it doesn’t have volume, how will you sell when it comes time. Buying is one thing, but selling is where you make your money. Without enough volume, you risk missing out on profit. Either you can’t sell all of your position above your entry price, or you can’t sell any of it because the market is too illiquid. So when it comes to finding stocks to buy, make sure there’s enough volume to account for your trade.High Volume Penny Stocks To Watch
- ServiceSource International Inc. (NASDAQ: SREV)
- Conformis Inc. (NASDAQ: CFMS)
- Biolase Inc. (NASDAQ: BIOL)
- NanoVibronix Inc. (NASDAQ: NAOV)
One of the penny stocks that jumped after-hours on Thursday was ServiceSource. The company specializes in outsourced sales and customer service. Operating in 178 countries, some of the company’s clients include software customers, cloud and SaaS businesses, medical device clients, and IT hardware. While the company hasn’t released news this year, the penny stock has been on the move following a string of insider buying.
You can check out the company’s filings for all FORM 4s that’ve hit since November. However, the latest one comes from one of the company’s 10% owners, Edenbrook Capital. The firm picked up over 143,000 at an average price of $1.50 between January 19th and the 21st. This added to the growing position and brought it up to more than 18.54 million shares. You’ll also find that among those many Form 4s, Edenbrook has been a buyer since late November.
In light of this, will the previously quiet penny stock start hitting scanners heading into the final days of January?Conformis Inc. (NASDAQ: CFMS)
Conformis is one of the penny stocks we’ve discussed recently. In fact, since the end of December, CFMS stock has managed to climb from around $0.70 to highs this week of $1.47. What has become a driver of momentum in this high volume penny stock started with its series of investor conferences that it participated in. The company also reported that it would release its Q4 and full-year 2020 financial results in March.
To give some context, Conformis is a medical device company. Specifically, it uses its iFit Image-to-Implant platform to manufacture implants and instruments personalized for each patient. These are things like knee and hip implants as well as single-use instruments for hospitals and surgical centers. This week things have heated up a bit more after its latest headline.
Conformis entered into a development and supply agreement with SITES Medical. SITES is focused on orthopedic medical device technologies. The two will incorporate SITES Medical’s proprietary OsteoSync™ Ti Technology into future Conformis’ cementless total knee replacement products. According to the company, OsteoSync™ Ti technology has been used in over 50,000 procedures since it was first introduced for clinical use.
Right now, Conformis is being followed by Oppenheimer. The firm has a Buy on the stock with a $3 target, which is 115% higher than its latest closing levels on Thursday.Biolase Inc. (NASDAQ: BIOL)
Another one of the penny stocks to watch recently has been Biolase. It, too, is a medical device or medical technology company of sorts. In particular, Biolase develops dental lasers. This month the company expanded its laser adoption in dental offices through an agreement with Dental Care Alliance. This is one of the largest dental support organizations in the US. It has more than 330 affiliated practices in 20 states. According to Biolase, the company expects the agreement to lead to a rollout across all Dental Care Alliance offices in 2021.
“BIOLASE’s ‘ EpicX™ and Epic Hygiene™ lasers are the standard of care in the dental industry…We are excited about the prospect of providing aerosol-free, less invasive soft tissue procedures, thereby creating a superior patient experience.”Dr. Don Gallo, Chief Clinical Officer for Dental Care Alliance
With this advancement, the market has woken up significantly over the last few weeks. Since the beginning of 2021, BIOL stock has jumped as much as 237%.NanoVibronix Inc. (NASDAQ: NAOV)
Finally, NanoVibronix turned heads on Thursday. Even following one of its most active sessions in weeks, NAOV surged during after-hours trading. The penny stock closed the regular session at $1.36 then continued to reach highs of $1.58 after-market. One of the recent catalysts to point to was the company’s recent shareholder update.
In it, the medical device company discussed several core milestones that traders have taken notice of. This included a distribution agreement with Ultra Pain Products, Inc., granting them the exclusive right to sell the company’s updated PainShield® products to and through distributors within the durable medical equipment sector. The arrangement is contingent upon meeting a minimum of $7.8 million in product purchases over the next 3 years.
With an expanded patent portfolio and distribution deals like that with Ultra, it will be interesting to see how NanoVibronix fairs in 2021.Do You Know How To Use Volume With Penny Stocks?
Volume can be one of the most basic yet tricky things to utilize when it comes to trading. Now, I’m not just talking about daily volume but intra-day volume as well. In many cases, day traders will look for different volume trends just as they do with candlestick trends. While this article didn’t get into the lesson on volume, we do have a few resources for you to use if you’re just getting started: