If January is a sign of things to come for 2021, traders and investors are going to make a lot of money this year. 4 stocks on the move are Brazil Minerals (OTCMKTS: BMIX), Ozop Energy Solutions (OTCMKTS: OZSC), Churchill Capital Corp IV (NYSE: CCIV), and Ideanomics (NASDAQ: IDEX).
HOW TO TRADE PENNY STOCKS
First up, it’s important to understand that trading penny stocks is 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 36,150% 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/NYSE 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, WKHS, 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/NYSE penny stocks. There is no shortage of multi-baggers in both markets at the moment. As we have said repeatedly, there’s no better time to be a penny stock trader and traders need to be aggressive. It’s like being at the casino. When you have a hot hand and the house keeps losing (hedge funds and institutions), take advantage of it while you can.
On the OTC, penny stocks that have the STOP sign are catching bids as traders bet on the stocks cleaning up their filings or doing a merger deal. With a STOP sign, the filings have not been filed on time so the company needs to catch up. Many of these aren’t good securities, but if there was a recent reinstatement (company updated profile checkmark) or filings are starting to pour in, a stop sign that has been asleep for years is one of the best buys you can make since the stop will become a yield and pink current will be on the way. Examples right now include CYBL, ASTI, SHOM, and PLYZ.
On the NASDAQ and NYSE, we are seeing epic short squeezes that are being led by the army of day traders over at Wall Street Bets. The strategy is to simply squeeze the shorts and we love this. It’s a momentum strategy that any trader can implement. Simply go to finviz.com and screen for stocks. Use the Top Gainers signal and screen for stocks with a float short over 10%. The strategy is that once a heavily shorted name starts running. Momentum players jump on board and the shorts are forced to cover as the stock climbs. This is what we are seeing in Gamestop, KOSS, Bed Bath & Beyond, BLNK, PLUG, WKHS, and even the dog shit stock Nikola.
Now that we covered the markets in general, we take a look at 4 stocks on the move BMIX, OZSC, CCIV, and IDEX to find out what’s behind the move and our outlook for each.
Stock #1 BMIX
BMIX is running as investors jump on the Tesla boom in lithium. BMIX is up 2600% in just the past five trading days.
BMIX started running on the first trading day of 2021 after receiving exploration permits for two additional mineral claims that now are part of its lithium project in the northeast part of the state of Minas Gerais in Brazil. The Company is focused on hard-rock lithium from high-grade spodumene pegmatites. As previously reported, Brazil Minerals now has direct ownership of projects in a triad of strategic minerals – lithium, titanium, and rare earths.
Areli Nogueira, Vice President of Exploration at the Company, stated, “Lithium is in high demand worldwide and Brazilian lithium reserves are now recognized as some of the best in yield and purity upon processing. Our lithium project holds high potential, and we look forward to its continued development.”
BMIX also owns a stake in Jupiter Gold (OTCMKTS: JUPGF). JUPGF has 100% ownership in several gold projects in development and exploration in Brazil. In particular, Jupiter Gold owns 100% of both the Alpha Gold Project, with over 22,000 acres of mineral rights for gold in the state of Minas Gerais, and the Alta Floresta Gold Project, with over 24,000 acres of mineral rights for gold in the state of Mato Grosso. Jupiter Gold is also developing a quartzite mine.
The bottom line is that the EV sector is one of the hottest places to invest and it’s all predicated on lithium. Look for BMIX to keep climbing.
Stock #2 OZSC
OZSC is another stock running on the back of the clean energy boom and Joe Biden in the White House.
OZSC has a development partnership with Zeem Solutions to work on high-power charging solutions to address the medium and heavy-duty commercial EV market.
Brian Conway, Chief Executive Officer of Ozop stated, “We are excited about this relationship with Zeem Solutions and look forward to working with their team to increase our presence in the burgeoning electric vehicle fleet charging industry. Ozop Energy/PCTI is positioned to take the technology and engineering challenges confronted by companies like Zeem head on. This relationship opens the door further into the commercial EV fleet market and should make a substantial contribution to our bottom-line for years to come.”
We have a few concerns about OZSC. First, OZSC has 3,397,958,292 outstanding shares, giving it a current market cap of $645 million. Keep in mind, 6 months ago OZSC was a failed surgical company. It has since pivoted to being an EV player. According to the latest 10-Q:
The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2020, the Company had an accumulated deficit of $8,173,098 and a working capital deficit of $4,635,877. In addition, the Company has generated losses since inception. These factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern.
There are also convertible notes.
On July 29, 2020, (the “Issuance Date”) the Company issued a 15% convertible promissory note, in the principal amount of $127,500, to an investor. This note matures 6 months after the Issuance Date. This note is convertible into shares of the Company’s common stock beginning on the Issuance Date at $0.011 for the first three months after the Issuance Date. After the first three months after the Issuance Date, the conversion price shall be equal to the lower of (i) $.025 or 50% of the lowest trading price for the thirty-five trading days prior to the conversion. The Company received proceeds of $100,000 on August 3, 2020, and this note included an original issue discount of $25,500. This note proceeds will be used by the Company for general working capital purposes. In conjunction with this note, the Company issued a warrant to purchase 12,750,000 shares of common stock at an exercise price of $0.01, subject to adjustments and expiring on the five-year anniversary of the Issuance Date. The Company allocated the proceeds to the debt $61,733 and warrant $40,267 based on the relative fair value. The embedded conversion feature included in this note resulted in an initial derivative liability of $198,239, a debt discount of $61,733 with the excess of $136,506 charged to interest expense. For the nine months ended September 30, 2020, amortization of the debt discounts of $42,500 was charged to interest expense. As of September 30, 2020, the outstanding principal balance of this note was $127,500 with a carrying value of $42,500, net of unamortized discounts of $85,000.
This is Zeem Solutions on Twitter.
All we can say is don’t become a bagholder.
Stock #3 CCIV
CCIV is running after Bloomberg reported that the SPAC was going to merge with Lucid Motors.
There are a number of reasons why we think this deal will happen.
- Andrew Liveris is on the board of CCIV but also on the board of LUCID.
- LUCID is backed by Saudi Arabia’s private wealth fund.
- CCIV is led by rainmaker Michael Klein.
- Klein has played a prominent role in guiding the kingdom’s investments, serving as an adviser to its Public Investment Fund. Among other deals, he advised on the Saudi Aramco initial public offering.
- Previous discussions between CCIV and AT&T’s DirecTV have collapsed, leaving LUCID as the most likely merger partner.
- Lucid plans to start deliveries of a $169,000 electric sedan to U.S. customers in the second quarter. The Air EV, which the company says can do more than 500 miles on a single charge, will be built at a factory in Casa Grande, Arizona. It plans to offer more affordable versions of the Air from 2022 and later will build a battery-electric SUV.
- LUCID CEO Peter Rawlinson was previously Tesla’s chief engineer on the Model S sedan.
- If a deal were to happen, LUCID officially takes the crown as the next Tesla. Downside looks limited with Michael Klein in the driver’s seat.
Stock #4 IDEX
As you can see from the chart below, IDEX is in a wedge and on the verge of a breakout higher.
Here are 10 reasons to be bullish on IDEX:
- IDEX just acquired WAVE. WAVE is a provider of inductive charging solutions for medium and heavy-duty electric vehicles. The company’s customers include the largest EV bus system in the U.S., the Antelope Valley Transit Authority, and its partnerships include Kenworth, Gillig, BYD, Complete Coach Works. All the EVs on the road are going to need charging. With WAVE doing about $7 million in revenues last year, there is a long runway for growth.
- IDEX just acquired 100% of privately held Timios Holdings Corp. in an all-cash deal. Timios currently has 285 employees and operations in 44 states and has booked over $60 million in YTD revenues, including over $8 million in October 2020.
- Ideanomics increased its stake in California-based Solectrac thereby taking total ownership to 24%; post-money once the additional third-party investment is finalized stake will reduce to ~22% With this investment in Solectrac, Ideanomics expands its global footprint in the electric vehicle (EV) industry, specifically in the category of specialty commercial vehicles.
- Ideanomics’ Mobile Energy Global (MEG) division and its contracting entity Qingdao Chengyang Medici have signed an agreement with Meihao Chuxing, a JV between BYD and Didi, for purchasing an initial 2K units of model BYD D1. BYD D1 is the world’s first custom-built, all-electric car specifically for ride-hailing with smart technology, safety, and comfort features for both drivers and passengers.
- Mobile Energy Global (MEG) delivered a total of 439 units in December vs. 151 units in November.
- Ideanomics owns 51% of Treeletrik, a Malaysian-based EV manufacturer whose business is primarily in logistic vans, mopeds, and scooters. As the China EV market matures, its manufacturers will face oversupply issues. This is where Treeletrik comes in.
- The company’s Medici Motor Works division is set to unveil 6 new electric vehicles.
- With the Timios and WAVE acquisitions and momentum in MEG growth, revenues should be on the low-end $140 million to as high as $200 million in 2021.
- 18.8% of the float is short. The shorts have bet $140 million that IDEX stock is going to drop. Just like how Elon Musk squeezed the shorts in Tesla, we expect CEO Alf Poor to do the same to IDEX shorts.
- We see IDEX taking one or more of its EV divisions public via IPO or SPAC. This makes a lot of sense as there are two divisions – electric vehicles and fintech. At current levels, both divisions are tremendously undervalued.
These 4 stocks are hot right now. There are always opportunities in the markets and it’s our job to find winning stocks. Huge gains can be made in such a short amount of time.
For those that missed out on the recent run in these 4 stocks, our best advice is to be patient and throw bids in below the market. Buying dips and selling rips as swing trades remains the best strategy in these markets.
Remember, all it takes is one or two to become a BMIX, OZSC, CCIV, or IDEX and you’ve crushed the market indices for the year. Whoever said to avoid small-cap stocks has no clue what they’re doing.
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.