It was a bloodbath on Friday for broader market stocks, but it was just another day at the office for penny stocks. The strength and awareness of retail traders have begun captivating interest. Over the weekend, thousands of new users descended upon Reddit, looking for information sources on the next stocks to buy. The trading frenzy sparked by GameStop’s (NYSE: GME) dramatic short-squeeze last week helped shine a light on something we’ve known for a while.
That is, new traders have begun to focus on more sophisticated strategies than just simply following the latest industry trend. While you can argue that the GME topic itself is a trend, there’s much that has spun-off from this. For starters, stocks with high short interest is a big point of focus right now. We also see plenty of attention focusing on low float penny stocks.
Still, there are traders now wanting to learn about how to day trade using technical analysis. The fact of the matter is that with the millions of new Robinhooders that were “created” last year, retail traders’ liquidity is at one of its highest. What does that mean for institutional money? Well, if they’re short, they may need to do some extra research of their own. According to Reuters*, last week, losses on short positions in U.S. firms top $70 billion.
What will this next week bring? Well, after the uproar against “the suits” and frustration surrounding platforms like Robinhood, Webull, and others, retail traders will likely be a focus again. But what will they be watching? We obviously won’t know until the market opens. However, here are some tech penny stocks that saw a strong finish the January. Will they be some of the top names to buy in February or avoid entirely?Penny Stocks To Buy [or avoid]
- Borqs Technologies Inc. (NASDAQ: BRQS)
- Entercom Communications Corp. (NYSE: ETM)
- Allied Esports Entertainment Inc. (NASDAQ: AESE)
- Waitr Holdings Inc. (NASDAQ: WTRH)
- MMTec Inc. (NASDAQ: MTC)
We discussed Borqs a few weeks back as 5G stocks became a focus for traders. Borqs is a software development company. Its products offer customizable smart connected devices and cloud service solutions. Over the last few months, in fact, the company has been signing deal after deal to build upon its product offerings for its clients. This involved an agreement for cooperation with the Huzhou South Taihu New Area for a 5G Industrial Park Project.
A joint venture will then add to the company’s growing list of infrastructure projects. Borqs and SkyCentrics had previously announced plans for a JV for manufacturing and delivering CTA-2045 technology-based products. These are for utility-scale automated smart controls.
However, aside from these developments, there haven’t been many new milestones reported in 2021. What we can see, however, is that BRQS stock has begun experiencing significantly higher levels of trading activity since early January. Month-to-date, the penny stock is up roughly 17%. Furthermore, Friday’s after-hours session is a point of interest. Shares of BRQS stock shot up from the $1.17 close to highs of $1.63 before the final close. Will that momentum remain in play on Monday?Entercom Communications Corp.
If there’s one niche that was hit hard by the pandemic, it was entertainment. In turn, we saw related companies, including marketing and outdoor venue operators, feel the burn. Entercom is somewhat of a hybrid in that it handles outdoor advertising for many clients. But it also has a different side as well. This side is more tech-centric and has become the main point of focus for the market.
Since the end of October, ETM stock has been on the rise. Shares have climbed from around $1.50 to highs last week of $5.34. Friday saw a final close of $4.65, just shy of the penny stock threshold price. Similar to Borqs, Entercom saw its own after-market momentum, which could also be a focus on Monday morning. Something else that has been circulated among traders is a recent product launch.
Last week Entercom introduced a new “BetQL Audio Network” aimed at sports gambling. This launch comes shortly following Entercom’s acquisition of QL Gaming Group. “With our acquisition of QL Gaming Group in November, we committed to leveraging our national scale to amplify the rapidly growing sports gambling landscape and deliver smart, data-supported sports-betting content to our listeners,” said Mike Dee, President of Sports, Entercom.
With iGaming and sports betting becoming a hot topic, companies with exposure to this niche have gained momentum. However, looking at ETM, traders may also want to factor in the massive move that the stock has made in just a few months. Will this continue, or is a pullback coming?Allied Esports Entertainment Inc.
Sticking with the sports topic, Allied Esports is taking a different approach to this type of entertainment. The company has been discussed for quite some time now as eGaming has gained a big spotlight during the pandemic. In particular, Allied has become a more specific focus since early December. This was when the company had just begun building back some steam following an earnings miss reported in November.
This year has become a bit more active for the penny stock in light of some recent events. First, Allied renewed its exclusive naming rights for its flagship property, HyperX Esports Arena Las Vegas. The company was also able to reach a deal to sell off its World Poker Tour (WPT) brand, with other poker-related business and assets, for roughly $78.3 million.
Additionally, Allied Esports and its Board are exploring strategic options for the esports business, including a possible sale. The company engaged Lake Street Capital Markets to help with the process. If you took a look at Allied’s filings last week, some interesting things are happening right now. Element Partners, LLC & Knighted Pastures LLC reported 19.5% and 14.1% stakes in the company, respectively. In particular, the Element Partners’ position was concerning the sale of Club Services, Inc. to Element. If you look at the aftermarket action on Friday, you’ll also see how the market responded to this. Similar to the other companies mentioned, will this bullishness continue Monday morning?Waitr Holdings Inc.
The pandemic clearly hit some industries hard last year. It also helped give others a boost. In this sense, Waitr Holdings was one that benefited. The company offers a platform to order food to be delivered via a smartphone app. The last year had seen shares of the company climb from 36 cents last January to as high as $5.85 last summer. WTRH stock currently trades around $3.50 as traders search for names like GrubHub, UberEats, and the like, which have benefited from social distancing measures.
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With the IPO of DoorDash, upbeat sentiment surrounding food delivery tech has boosted momentum. This year, Waitr has seen its shares climb from under $3 to over $4, with above-average trading volume driving momentum. As the market awaits more earnings from companies this quarter, we can see that Waitr is experiencing a bit of growth. The company posted a second-consecutive quarter of continued profitability and operating cash flow in its last quarterly report. With more people using delivery apps, will WTRH continue benefiting?MMTec Inc.
Finally, MMTec is one of the lesser-discussed names on this list. However, some interesting trading activity and a general uptrend since late-November could have this on watch lists in 2021. The company itself provides access to the U.S. financial markets, Chinese hedge funds, mutual funds, registered investment advisors. MMTec helps these financial institutions accelerate integration into the overseas markets by offering a complete suite of trading solutions. These include services like fund establishment, issuance, custody, transaction, and settlement.
Obviously, with the growing interest in U.S. markets, MMTec could be one of the companies to follow. Fintech stocks have also begun growing in popularity this year. We saw a nice surge of momentum for several Chinese fintech names a few weeks back. As for MMTec, one of the other things that could be driving attention on financial firms like this is the potential re-engaging with China trade talks. The recent transition of power Joe Biden has boosted hopes of improved foreign relations.
With shares of MTC stock up over 100% since the start of Q4 2020, it has become one of the tech penny stocks to watch. Also, Friday’s aftermarket session saw shares of MTC continue climbing. Like the others mentioned above, it could be something to keep in mind heading into the new month.