If the first week of 2021 is the sign of things to come this year, penny stock traders and investors are going to make a lot of money. 4 penny stocks that really lit up the first week of 2021 were BTCS (OTCMKTS: BTCS), CloudCommerce (OTCMKTS: CLWD), Future FinTech Group (NASDAQ: FTFT), and LM Funding America (NASDAQ: LMFA).
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.
We got our subscribers in early on TSNP, which you can read our latest here, and ENZC, which you can read about here. It’s also best to own a portfolio of quality penny stocks. For some that can be as many as 10 to 20 or more penny stocks.
Now, when we say that we find momentum BEFORE it happens, we are investors 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 7750% in ENZC and over 18,650% in TSNP.
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.
Now we know many prefer to day trade, but we are not day traders here at Insider Financial. It doesn’t suit our personality and we don’t like the intraday moves markets make. We have found we made more money being patient and ignoring the day to day noise of the markets.
If you want to day trade, Insider Financial is not the place for you. When it comes to day trading, and if that’s what you are after, we recommend the folks at True Trading Group, which you can check out their live streams here.
OTC PENNY STOCKS VS NASDAQ PENNY STOCKS
The fact is that there is always a bull market somewhere. That’s why it’s important for penny stock investors to trade both OTC and NASDAQ/NYSE penny stocks. There are always opportunities if you give yourself the flexibility to trade all markets.
Last year, for the first half of 2020, it was much more profitable to trade NASDAQ penny stocks than OTC. That is where we and our subscribers were positioned. We captured the runs in SRNE, NIO, INO, IBIO, WHKS, and many others. Then once the summer came, many of the COVID runners had failed to find momentum. We then pivoted to OTC and caught the runs in TSNP, ENZC, MMEDF, and many others.
So far this year, it’s best to play both OTC and NASDAQ. With Bitcoin running, we are seeing crypto plays making huge moves. With Joe Biden coming into the White House and Democrats taking control of the Senate, we are seeing cannabis and green energy plays catching bids.
In this article, we take a look at penny stocks BTCS, CLWD, FTFT, and LMFA to find out what’s behind the move and our outlook for each.
Penny Stock #1: BTCS
BTCS is a blockchain play running on the back of the strength in Bitcoin. The company also just got a fresh cash injection of $1.1 million, including $810k from its CEO.
The investment was done via a convertible preferred offering and the preferred shares are only convertible after two years.
Charles Allen, CEO of BTCS, said “Our investment, which is effectively locked up for two years with resale severely limited thereafter, demonstrates that we are in this for the long haul and aligns our interests with those of our shareholders.”
BTCS business plan is to acquire additional Digital Assets to provide investors with indirect ownership of Digital Assets that are not securities, such as Bitcoin and Ethereum. BTCS is also internally developing a digital asset data analytics platform and seeks to acquire controlling interests in businesses in the blockchain industry.
BTCS has a current market cap of $56 million.
Penny Stock #2: CLWD
CLWD is running after announcing plans to launch an artificial intelligence (AI) venture that will focus on using AI to enhance its successful SWARM solution with the goal of cutting advertising costs by as much as 50%.
CLWD’s flagship solution, SWARM, analyzes a robust mix of audience data to help businesses find who to talk to, what to say to them, and how to market to them. CLWD does this by applying advanced data science, behavioral science, artificial intelligence, and market research techniques to discover, develop, and create custom audiences for highly targeted digital marketing campaigns.
“The tools are now available to do what humans cannot do,” said Andrew Van Noy, Cloud Commerce’s CEO. “Our SWARM solution has met with great client success, which has encouraged us to take the next step – using state-of-the-art tools, such as AI to eliminate inefficiencies that could potentially reduce the costs of advertising by as much as 50%.”
CLWD has a current market cap of $32 million.
Penny Stock #3: FTFT
FTFT ran from under $2 to over $10 in just two trading sessions.
FTFT is rallying after the China Copyright Protection Center accepted Future FinTech’s application for ten software copyrights relating to blockchain technology applications, which it first submitted for CCPC’s review in June 2020. The company has been developing and improving an anti-counterfeiting and tracing system by using blockchain technology for its blockchain-based e-commerce platform Chain Cloud Mall (CCM).
“The system we built is simply a blockchain-based credit point reward and settlement center for our online shopping mall. Anti-counterfeiting and rewarding system in e-commerce is only the first application of this technology. Our supply chain system, contract farming system, and order management system may also use this technology,” CCM General Manager Zhi Yan commented.
We’d recommend investors not get too excited about FTFT as it was previously a fruit juice company and changed its name to ride the Bitcoin wave. FTFT has a current market cap of $363 million and reported just $955k in sales in 2019.
Penny Stock #4; LMFA
LMFA is a penny stock we really like. LMFA has a current market cap of just $33 million and a float of 12.91 million shares.
LMFA is running as it seeks to capitalize on the hottest market trend right now – SPACs. LMF Acquisition Opportunities filed for an IPO of 7.5M units at $10 each to raise ~$75M. The SPAC intends to focus initially on a business combination with companies or assets in the financial services, including potentially the fintech sector, with an enterprise value of ~$250M-$500M.
The units are expected to trade on the Nasdaq Capital Market under the symbol “LMAOU” consisting of class A common stock and warrants; once the components trade separately, the class A shares are expected to trade under the symbol “LMAO” and the warrants under “LMAOW”.
Under the terms of the proposed offering, LMFAO Sponsor would own 20% of LMF Acquisition’s issued and outstanding common stock after the offering. LMFAO Chairman and CEO Bruce Rodgers is also chairman, CEO, and president of LMFA, a specialty finance company that provides funding to nonprofit community associations primarily located in Florida.
These 4 penny stocks are hot right now. There are always opportunities in penny stocks and it’s our job to find the bull markets. Huge gains can be made in such a short amount of time.
For those that missed out on the recent run in these four penny stocks, our best advice is to be patient and throw bids in below the market. Buying dips and selling rips as swing trades a good strategy once a stock turns into a momentum play.
Remember, all it takes is one or two to become a BTCS, CLWD, FTFT, or LMFA and you’ve crushed the market indexes for the year. Whoever said to avoid penny stocks has no clue what they’re doing.
As always, good luck to all (except the shorts)!
WHEN INSIDER FINANCIAL HAS A STOCK ALERT, IT CAN PAY TO LISTEN. AFTER ALL, OUR FREE NEWSLETTER HAS FOUND MANY TRIPLE-DIGIT WINNERS FOR OUR SUBSCRIBERS. WE SPECIALIZE IN FINDING MOMENTUM BEFORE IT HAPPENS!
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.