Last week was a tough one for penny stock traders. Most of the high-flyers on the OTC Markets saw significant pullbacks as investors rushed to lock in profits before the New Year. However, there are still a few bright spots. Alpine 4 Technologies (OTCMKTS: ALPP) and American Battery Metals (OTCMKTS: ABML) both made new highs last week, while Arcis Resources (OTCMKTS: ARCS) took a massive dump.
In this article, we take a look at what’s happening with ARCS, ABML, and ALPP. We also give some insight on how to trade penny stocks and what investors should look for when it comes to the OTC Markets.
HOW TO TRADE PENNY STOCKS
First up, it’s important to understand that trading penny stocks are not the same as trading blue chips. As we have stressed repeatedly to our subscribers, the key to trading penny stocks is finding momentum BEFORE it happens and then be patient.
Now, when we say that we find momentum BEFORE it happens, we are swing traders looking to position our subscribers BEFORE the move happens. This is where the big money is made and why so many of our subscribers are sitting on gains of over 5899% in ENZC and over 13,650% in TSNP.
If you want to day trade, this is not the place for you. If you want to make a few hundred bucks and then lose a thousand dollars the next day, we hear Tim Sykes has plenty of openings.
We always alert our subscribers first before we publish for our regular readers. This is the value of having a subscription to Insider Financial, which you can sign up for here. We alert our subscribers with our best ideas before our regular readers.
Penny Stock #1 ARCS
ARCS was/is a classic pump and dump. Look at the volume accumulation prior to December 9th.
Then look, what OCMillionaire Tweeted on December 9th and then you can see the volume spike as indicated by the arrow on the above chart.
— OCMillionaire (@OCMillionaire) December 9, 2020
Here is the screenshot as we expect OCMillionaire to delete this Tweet.
Our friend The Penny Wolf was the first to call OCMillionaire out. Penny stocks are in the triple zeroes for a reason. They are late on filings and there is usually no information coming directly from the company. Some of the biggest runners happen when a company starts cleaning up its financials and moves to get current with filings. We, like every other penny stock investor, love these types of plays.
TSNP was a triple-digit play that we alerted our subscribers at $.0008; however, there are big differences between why TSNP ran and ARCS didn’t. Here is what we said about TSNP.
Tesoro Enterprises is a clean shell trading on the Pink Sheets. The company retained George Sharp as an adviser to help them find a merger candidate. Sharp was retained on October 28th when TSNP was trading in the triple-zeros. We knew that something big was brewing with the big uptick in volume and a total lack of sellers.
As you can see from the chart below, many of our subscribers got in early as we knew a deal was going to be announced. We just didn’t know it was going to be HUMBL. What started as a trade has now become an investment.
TSNP was a clean shell and Pink current on the OTC Markets. TSNP also was putting out news and being totally transparent in what was happening. With ARCS, it was just rumors and hearsay on Twitter and iHub. Once OTC Markets saw what was happening, it slapped ARCS with the Caveat Emptor (CE) symbol. Contrary to what some say, OTC Markets is looking to protect investors, not hurt them.
What should investors do now in ARCS?
Well, no one should ever put all their eggs into one stock. We recommend investors buy a basket of penny stocks to minimize their risk. Plays like ARCS are going to happen. It’s part of playing the OTC Markets. Investors can decide to hold and wait. Maybe the company will do the right thing and clear all this up. Or investors can take the loss before the New Year to offset any capital gains in other stocks. Again, we are not financial advisors and this is not financial advice, but you should consult with your nearest financial advisor if you have these types of questions on what to do.
We sympathize with all who got caught and wish things like this didn’t happen on the OTC Markets. It’s a bad mark on all penny stocks and needs to stop.
Penny Stock #2 ALPP
ALPP has been a tremendous winner this year for our readers and subscribers. We profiled ALPP back in September when the stock was trading just under $.05 a share and which you can read here. However, it took 2 months to play and finally started moving in November. What a move in ALPP over the past month!
The reason for the big move in ALPP was its acquisition of Impossible Aerospace Corporation. Impossible Aerospace builds high-performance electric aircraft and drones. Its customers range from the US Airforce to the City of Santa Clara, and other municipalities.
Impossible Aerospace is Alpine 4’s first acquisition in the UAV space and will serve as a cornerstone to build upon. The shareholders of Impossible Aerospace are primarily a grouping of larger venture capital funds such as; Bessemer Venture Partners, Eclipse Ventures, Airbus Ventures, and its CEO, Spencer Gore.
The transaction will be completed in a reverse triangular merger transaction with a newly formed subsidiary of Alpine 4. Upon meeting the final closing conditions, Impossible Aerospace will be a wholly-owned subsidiary of Alpine 4.
The deal closed on December 15th.
With the Impossible Aerospace acquisition, ALPP also acquired the services of founder Spencer Gore. He previously served as a battery design engineer at Tesla Motors, where he developed the world’s longest-range electric vehicle battery for the Model S. His time spent with Tesla and Space X will help Impossible Aerospace execute on the growing demand from the US Air Force for domestically made electric aircraft.
ALPP is unlike many other penny stocks on the OTC Markets. ALPP generated revenue of $8.72 million for Q3 2020, an increase of 23% over Q3 2019 revenue. The company has generated $26.6 million in revenue for the first three quarters. Look for further highs in ALPP in 2021.
Penny Stock #3 ABML
We said back in September that ABML was gearing up to run when it was trading at $.09 a share, which you can read here. Like ALPP, ABML took some time to play out, but we finally got the run we were looking for.
ABML is a smart play on the electric vehicle (EV) boom with its pilot lithium-ion battery recycling plant in Fernley, Nevada. Elon Musk has said repeatedly that his biggest obstacle is ensuring that Tesla has enough raw materials to meet the demand for the lithium-ion batteries it needs.
Over the past three months, ABML has achieved three critical milestones that enable the Company to move ahead in permitting, constructing, and commissioning its pilot lithium-ion battery recycling plant in Fernley, Nevada:
- Purchased the Pilot Factory Land – ABML purchased 12.44 acres of undeveloped land located at 345 Winston Lane, Fernley, Lyon County, Nevada. ABML will be constructing five separate building areas on this property to create a Pilot Plant campus that includes: Production Process Areas, Feedstock Sorting Area, Analytical Laboratory Spaces & Process Development Bays, a Storage Warehouse, and general Office Space.
- Secured Water Rights – ABML has secured multiple water allocations from the Fernley Area Basin 76 (Lyon, Washoe, Storey, and Churchill Counties) of Nevada’s West Central Region (Hydrographic Region 5). By securing these water rights, ABML ensures it can operate its pilot facility at full throughput with adequate water capacity for many years to come.
- Hired Design/Build Construction Firm – ABML has selected Miles Construction as the design-build contractor for its Fernley pilot plant campus. ABML is finalizing its permitting processes with the City and NDEP and will announce updated permitting and construction timelines in early 2021.
“ABTC is making great strides to construct our pilot lithium-ion battery recycling facility in Fernley, Nevada as quickly as possible. We are grateful for Nevada’s support to do so. At full capacity, our pilot facility will recycle 20,000 metric tons of feedstock a year to recover critical and strategic materials needed to manufacture new EV and consumer electronic batteries – and to ensure these lithium-ion batteries do not end up in the landfill as waste,” said CEO Doug Cole.
AMBL is a smart way to play the EV boom with former Tesla executive Ryan Melsert as its chief technology officer (CTO).
Penny stocks are extremely volatile. Huge gains can be made along with painful losses like in ARCS. This is why it’s best to own a basket of what you believe to be good quality penny stocks. By doing so, the risk is spread out over 5 to 10 or more penny stocks. All it takes is one or two to become a TSNP or an ENZC and that more than makes up for any bad experiences like ARCS.
As always, good luck to all (except the shorts)!
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Disclosure: We have no position in any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article. Insider Financial is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This article is not a solicitation or recommendation to buy, sell, or hold securities. This article is meant for informational and educational purposes only and does not provide investment advice.