Can These Biotech Penny Stocks Rebound In Q2
The phrase “penny stocks” refers to shares of companies trading under $5. These stocks can be a low-cost alternative to blue-chip stocks. Recently, investors have seen a lot of bullish interest in the market and, specifically, with biotech. The focus on biotech stems from the coronavirus pandemic, which has put many new eyes on the stock market in general.
In April, biotech stocks continue experiencing volatility, with the latest trend being consolidation. Does this mean penny stocks aren’t worth it if they’re involved with the biotech industry? Not necessarily, and many traders have begun looking for names that have followed this consolidation trend.
Will Biotech Penny Stocks Rebound?
Take a look at some of the benchmark ETFs like the Nasdaq Biotechnology ETF (NASDAQ: IBB) and the S&P Biotech ETF (NYSE: XBI). While the broader indexes, including the Nasdaq and S&P, rallied on Friday – albeit on light volume – both XBI and IBB pulled into their 200-day moving averages. This level (200DMA) has acted as an area of support for both biotech ETFs in 2021.
The biggest question now is, will the latest consolidation trend in the broader sector end up becoming an opportunity to capitalize on consolidation? Also, will this trend reverse heading into the second quarter? Furthermore, since the 200DMA has previously acted as support, will it do so once again? All things to keep in mind if you’re looking at the bigger picture right now from a technical perspective.
When trading penny stocks or even investing in them, a few things need to be noted. Companies with solid prospects will be much more attractive to investors. It would help if you also looked at current trials and how close they are to commercialization. If the company is producing something related to the pandemic, it can also be useful to note. That’s the hot trend right now and one that traders continue reacting to.
Penny Stocks To Buy [or avoid]
No matter what, proper research is fundamental when buying any stock, let alone penny stocks. Many experienced traders will tell you that volatility comes with the territory. Yes, the risk can be high, but so can the reward.
This article will highlight three biotech penny stocks that have seen some consolidation in April after a strong start to the year. After reading, I’ll leave it up to you to decide whether or not you should avoid these entirely or if they’ll become good penny stocks to buy in the second quarter?
- Citius Pharmaceuticals (NASDAQ: CTXR)
- Asensus Surgical Inc. (NYSE: ASXC)
- Genetic Technologies Limited (NASDAQ: GENE)
This company develops and commercializes critical care products. In early March, Citius showed off some of its product candidates. One of these was stem cell therapy for COVID-19 related acute respiratory conditions. This was presented at the H.C. Wainwright Global Life Sciences…