The story everyone in the small-cap world is talking about is IWM (the Russell 2000 ETF) and how its stalled into resistance.
Sure, $160 is an all-important level right now… but there are plenty of other trades going on… and I’m still hunting down to find my two bread-and-butter setups — the same ones I’ve used to crush small-cap momentum stocks in 2019 so far—and achieve my best trading results ever.
Right now, I am highly selective with my momentum stock trades. It’s the time to only take calculated trades — your best setups. If you’re piling into all the small caps that move… you’re just asking to be punished.
That’s why I only keep a handful of setups on my watchlist every single week.
In this very first edition of Momentum Plays of the Week, I’ve got 3 stocks on my watchlist — ones that provide us with a lot of leverage and potentially explosive profits.
If I see the perfect attack plan, I’ll make sure to let my clients know about my moves.
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3 Stocks Under A Buck I’m Watching Right Now
I’m focused on stocks under $1 right now, since the overall market caught a dip. This could affect some larger small-caps like your Papa John’s (PZZA), 8X8 (EGHT), heck even Fitbit Inc. (FIT).
But the thing is… even if small-cap stocks pull back overall… there are some tricks I have up my sleeve.
You see, I’m looking at stocks that are super tiny. That’s our edge in the markets, I have the one-up here because hedge funds really can’t trade “penny stocks”.
Straight up, my chart patterns speak for themselves… and you’ve already seen time and time again why they work, and more importantly, how I profit from them.
The thing about market-wide selloffs and what my experience tells me, is that it probably wouldn’t weigh down stocks like ANGI or ZAGG.
That’s why I’m focused on YRIV, ONVO, FCEL.
Yangtze River (YRIV)
Let’s take a look at Yangtze River Development (YRIV) on the daily chart.
See the candle over candle on YRIV? It might be time for me to take a small speculative 1-2 week swing on this turd due to its history of big spikes.
There are only 30M shares floating… that means there’s not a whole lot for us everyday traders.
Any catalyst that randomly hits the wire could send YRIV higher. For me, the chart setup looks juicy.
It got a pretty strong close and held at a key support level (the blue horizontal line).
I’m going to keep and eye on this one and try to find an area of value… one that lets me know exactly where to get in and get out.
I’ll say this… YRIV is approaching a long-term downtrend line right about now… and if it breaks above that, it could test its next resistance level at $0.75.
Organovo Holdings Inc. (ONVO)
On to the next one.
ONVO jumped on news recently and it’s got some looming catalysts. If the stock breaks above $0.40 and it’s got a lot of range to $0.50.
Keep in mind, this is a very speculative play, so if I get in… it will small bet from me on ONVO, just like YRIV would be.
If you look at the daily chart, it looks pretty similar to YRIV.
However, ONVO has a small bull flag forming right about now. That’s why I’m keeping a close eye on the $0.40 level. If I place any bets on ONVO or YRIV, I’ll be sure to let my clients know in real-time.
FuelCell Energy (FCEL)
Again, small bet for me if I take it and reduced exposure overnight when possible. FCEL has been in the news lately, after the company announced it expanded its carbon capture deal with oil gian Exxon Mobil (XOM).
Right now, I’m looking for this as a Fibonacci retracement play.
Check out the chart above, FCEL ticked right down to a key Fib level and bounced. I’ll be keeping an eye on the 50% and 61.8% key levels for potential entries.
For now, I’m going to be patient and wait for the perfect entry, as with YRIV and ONVO. It doesn’t make a whole lot of sense to just jump in randomly right now.
I want to leave you with a pro-tip with these plays. Make sure you have a plan in place and adapt as you see chart patterns change and news come out.
[Ed. Note: Jason Bond runs
JasonBondPicks.com and is a swing trader of small-cap stocks. In 2015 he earned a 180% return on his money. Then in 2016 he turned a $100,000 account into $430,000! Discover How He Did It]
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