Election hysteria has hijacked the world’s attention for the month of November, but several little-known penny stocks are making headway with traders and investors this month.
Contrarian Financial Instruments for the Month of November
Source: StockCharts NASDAQ Composite Index
US financial markets were precariously balanced heading into November. The presidential elections have thrown a wrench in the works, by injecting volatility into the markets at a time when the pandemic is back with a vengeance. Stock markets react negatively to shocks, jolts, and uncertainty, but it is this volatility that provides profitable trading opportunities to participants.
Among the many geopolitical triggers affecting the markets include the victory by former VP Joe Biden over incumbent President Trump, and the concomitant balance of power in the Senate which is now clearly in Republicans’ favor, with at least 50 Republican senators confirmed and Georgia Republican candidates facing a run-off in January.
The market will react positively to Republicans retaining control of the Senate, since this means that adverse policy (increased bureaucracy, higher corporate taxes, green new deal legislation, repeal of tax codes, et cetera) will not pass. We have seen a resurgence of confidence in the financial markets, particularly at a time where a contentious election cycle is still brewing. The
Supreme Court has already weighed in on the state of the votes in Pennsylvania, and recounts are expected in Georgia and Wisconsin.
To be clear, nobody is anticipating a victory by the incumbent, but markets are reacting positively to the rule of law playing out. President-elect, Joe Biden has threatened a nationwide mask mandate upon taking office on January 20, 2021. For now, markets are cashing in, given the prospect of a potential shutdown for 4-6 weeks that would likely cripple economic activity in
2021.
On a more positive note, things are looking good vis-a-vis a potential coronavirus vaccine, and traders and investors are risk-on at this time. A strong corporate recovery has taken place in the final quarter of 2020, in line with what President Trump was anticipating during his campaign. Several barometers of economic performance include the US dollar index which measures the value of the USD against a basket of currencies. When the dollar weakens relative to other currencies, this promotes US exports but makes imports relatively more expensive.
For the year-to-date, the S&P 500 index is up from 3,257.85, to 3,558.22, and the NASDAQ composite index is currently at 11,761.58, from 9,092.19, while the Dow Jones Industrial Average (DJIA) is up from 28,868.80 to 29,227.21. Similar trends are evident across US bourses. Yet, despite the bullish sentiment, many stocks have been crushed in recent months, particularly airlines, cruise lines, travel and tourism, retail and manufacturing, et al.
Alternative Investment Options Including Penny Stocks, Gold, and Crypto
It is against this backdrop that traders and investors are seeking out alternatives to mainstream stocks and financial instruments. Gold has performed well, gaining double digits for the year-to-date, and Bitcoin has also shown remarkable resilience as a hedge-style option against geopolitical upheaval. For the most part, everyday traders and investors are seeking affordable alternatives with high growth potential. These come in the form of this list of penny stocks to watch today :
Source: StockCharts NASDAQ Composite Index
MiRagen Therapeutics Inc is currently trading around $14.34, and is trending bearish. However, the stock has outperformed expectations in Q1, Q2, and Q3, with earnings beats. While currently overvalued, the short-term forecast 2-6 weeks is bullish, the mid-term forecast 6 weeks – 9 months is bullish, and the long-term outlook 9 months + is bullish too. Thanks to its acquisition of Viridian Therapeutics, including VRDN-001 the stock has tremendous upside potential moving forward. The stock performed well in October, and it has consolidated in a higher range in November, which is good news for those looking to invest in something a little different.
Source: StockCharts NASDAQ Composite Index
Findit, Inc (FDIT) is not on any of the exchanges, since it’s an OTC penny stock. It is currently regarded as neutral, and patterns have been detected with the stock. Since penny stocks typically trade under $5 per share, this fits the bill perfectly. Several days ago, the company submitted its product to Apple iOS Test Flight, and that will invariably help the stock with greater exposure from market participants. There isn’t much to speak of in November, but during October, the stock had a tremendous run, hitting 0.2200 before slowly dropping to its current level. For the year-to-date, FDIT is up from $0.0317, to its current level – a fourfold increase, with upside potential remaining. The social network platform is being promoted all over the place, and despite low volumes, there is some growth potential in it.
Source: StockCharts NASDAQ Composite Index
Digital Ally Incorporated (NASDAQ: DGLY) is another penny stock with promise. Currently, it is regarded as bullish, although its 2020 heyday was in early June when the stock hit $5.33 per share. Performance-wise, DGLY has been greenlit over the short-term, mid-term, and long-term. The consensus earnings in Q2 and Q3 exceeded expectations, which is always a good thing when assessing the merits of a penny stock. While revenue has been declining since 2016, Aegis Capital recently upgraded DGLY to a buy. This week, the company released its third-quarter results for its video surveillance, and law enforcement products, indicating a 23% increase in revenue to $3,588,640 up from $2,923,148, year-on-year. EPS was $0.02, and the company added 2 additional lines of products. This all bodes well for investment in DGLY as a strongly performing contender for a contrarian investment option.
