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Best Penny Stocks To Buy? 5 With Massive Bullish Options Volume Today

Penny stocks to buy according to options traders today.
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When you think about penny stocks, rarely do options come to mind. That’s at least according to some traders in the stock market today. One of the reasons they’re buying penny stocks in the first place is to leverage small sums of money in exchange for more significant upside potential. Options are a cheaper way that investors can theoretically control more shares of higher-priced stocks without having the capital requirements to do so.

Believe it or not, many penny stocks also have options. Used as a speculative asset, some traders will look at options statistics to gauge bullish or bearish sentiment in specific stocks. Today we look at a few penny stocks with unusually high levels of Call buying activity. While this is not a guarantee that the underlying stocks will go up, it may be something to account for as you research the best penny stocks to buy based on retail sentiment.

Best Penny Stocks To Buy?

  1. Camber Energy Inc. (NYSE: CEI)
  2. FuboTV Inc. (NYSE: FUBO)
  3. Tilray Brands Inc. (NASDAQ: TLRY)
  4. Mullen Automotive Inc. (NASDAQ: MULN)
  5. Paysafe Ltd. (NYSE: PSFE)

Penny Stocks, Options Trading, Best Stocks To Buy

It doesn’t necessarily matter the price of the stocks you’re looking to buy. It’s more about the strategy you use to formulate your trade thesis. Regarding options volume, you can see things like Open Interest (O/I), volume, and if the volume is for specific strike prices with Calls or Puts. Generally speaking, an immediate assumption is that higher Call volume means traders are bullish, and Put volume means traders are bearish. But just like stocks, you can also “short” or “sell to open” your trade. Different options trading strategies allow you to take advantage of specific trends.

Whether it’s collecting a premium when stocks go down or capitalizing on sideways trading trends, options offer various ways to make money in the stock market. For this reason, it’s essential to understand that the face value of high Call or Put volume doesn’t necessarily mean a bullish or bearish move will come next. However, this data can come in handy from a more general stance and assuming you’re going to use more than options volume as your gauge to trade penny stocks. Today, we look at a handful of penny stocks with unusually high Call volume. Are they a buy?

1. Camber Energy Inc. (NYSE: CEI)

Energy stocks are heating up again. Even with the stock market down this week, you can count more than a few energy penny stocks on the rise. Camber Energy is one of these cheap stocks to watch and has become somewhat of a fan favorite among retail traders.

What does Camber Energy do? The company provides energy and power solutions to North American energy clients. The company has interests in US oil and natural gas assets and has remained a focus for those looking for cheap energy stocks to trade.

This week, shares of CEI stock have made a substantial rebound with the rest of the sector. On Friday, the energy penny stock jumped back above the $0.70 mark for the first time since Tuesday. What does the options chain say about CEI stock right now? If you look at next week’s May 20 Call options, you’ll see a significant amount of open interest and volume. The highest levels sit at the $1 Calls right now.

Penny Stocks To Buy In May? 3 To Watch Before Next Week

2. FuboTV Inc. (NYSE: FUBO)

best penny stocks to buy FuboTv FUBO stock options

Traders have had a love/hate relationship with FuboTV over the last few months. It has been a non-stop barrage of selling as Fubo has battled bearish sentiment in the stock market. We even discussed its potential of becoming a penny stock last month. As fate would have it, FUBO stock dipped into the sub-$5 territory shortly after.

Despite this as the case and in light of some negative sentiment in streaming entertainment stocks, FUBO shares have managed to rebound over the last two sessions. Even after a bearish outlook from the company, traders seem to have taken a more bullish tone on the stock. The options chain shows some short-term optimism according to the amount of Call volume today.

Specifically, the May 20th (next week) $3.50 Calls have gained the most attention. Heading into the session, there was less than 2,000 O/I. As of this article, more than 37,000 contracts have already been traded. As a close second, FUBO stock’s $4 Calls have also seen a significant jump in volume compared to O/I.

3. Tilray Brands Inc. (NASDAQ: TLRY)

best penny stocks to buy Tilray Inc. TLRY stock options

Like streaming entertainment stocks, marijuana stocks have also gotten a bad reaction in the stock market. Failures to put new legislation in place in the US and a string of broken promises have bruised the reputation of the cannabis industry. Despite this as the case, investors have grasped at hope for the long-term prospects of this cash crop.

Tilray Brands has become somewhat of a high point for meme stock traders. Shares of TLRY stock were wrapped into the mix of stocks that Reddit traders favored during the AMC/GME pandemic rally. This week, TLRY has bounced back from 52-week lows as traders hunt for “oversold” stocks. In a Barron’s report earlier this month, Tilray was highlighted among the names that State of New Jersey Common Pension Fund D purchased. The Fund also grabbed shares of companies like Uber and Advanced Micro Devices.

The company’s recent earnings results seem to have also brought some optimism to the market. It recorded 23% revenue growth for its fiscal Q3. Tilray also noted that international cannabis revenue jumped 4,000% year-over-year. While this remains a penny stock, the company’s revenues have remained a bullish driver. Tilray reported a gross profit of $40 million on $152 million in revenue.

Once again, the May 20th options chain is in focus. However, it could suggest some mixed sentiment. For starters, there is much more Call volume on Friday than Put volume. In particular, the May 20th $4.50, $5, and $5.50 Call strikes are in question. As far as Puts are concerned, there is a glaring O/I figure at the $4 strike Put.

4. Mullen Automotive Inc. (NASDAQ: MULN)

best penny stocks to buy Mullen Automotive MULN stock options

LIke Camber, Mullen Automotive has come into favor with retail and Reddit traders this year. The EV automaker gained attention during the first quarter after management expressed strong optimism about its growth prospects. However, MULN stock slid back to earth after researchers at Hindenburg Research discussed how Mullen wouldn’t be able to deliver on multiple “grand promises” made. Known for their short take on stocks, in general, the market has grappled between speculation, downbeat sentiment, and an overall bearish trend in major indexes.

However, things seem to have made a rebound this week after Mullen’s latest update. It reported a preliminary summary of second-quarter financial results. Quarter over quarter, cash and equivalents great to over $65 million. Meanwhile, the company saw a decrease of more than 10% in notes payable.

Most notably, Mullen signed a proposal with Thurner Design for the vehicle development of the Mullen FIVE RS, a high-performance EV sport crossover vehicle featuring close to 1,100 HP, 0-60 mph in just 1.95 seconds, and 200 mph top speed. According to the company, Thurner Design’s team is responsible for shaping and directing designs and brands like Rolls- Royce Motorcars, Bentley Motors, Bugatti, Porsche, Lamborghini, Aston Martin, and Mullen Automotive.

There was substantial Call option volume at the $1 strike levels expiring May 20th, May 27th, and June 3rd. O/I was significantly lower coming into the day as options volume surpassed those figures.

5. Paysafe Ltd. (NYSE: PSFE)

best penny stocks to buy Paysafe Ltd PSFE stock options

The payments company Paysafe has turned some heads in the stock market today. Following news of a global payment partnership with Playtech, the company’s payment solutions will now have additional offerings in iGaming operations.

The company had encountered some intense selling pressure following recent earnings. But that seems to have subsided on Friday. PSFE stock hit early highs of $2.36 during the morning session, up from premarket lows on Thursday of $1.81. It may also be worth noting the options volume today. In particular, the market seems torn at the $2 strike. Both Call and Put volumes are around the same level right now. Open interest is also in relative parity for the May 20th expiration.

What to Know About Buying Penny Stocks on May 13th

Final Thoughts On Penny Stocks

Penny stocks can be worth the risk if you know what you’re doing. Understanding how to navigate volatile trading environments is critical. But, also using data to your advantage can become an asset too. Options volume like insider trading reports can be a way to gauge sentiment. It isn’t the only way to do so, and there aren’t any guarantees in the market altogether. However, if you are looking for penny stocks with unusual options activity, these are just a few of the names that turned heads in the stock market today.

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The post Best Penny Stocks To Buy? 5 With Massive Bullish Options Volume Today appeared first on Penny Stocks to Buy, Picks, News and Information | PennyStocks.com.

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Economics

Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

A week ago, following dismal guidance by Walmart,…

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Best Day For Discretionary Stocks Since COVID-Crash As Consumer Recession Bets Get Steamrolled

A week ago, following dismal guidance by Walmart, Target indicated that it is seeing a shift in the consumer wallet away from the pandemic purchases and into reopening purchases - including apparel - and the pace of this shift caught some retailers off guard on inventory. WMT, COST, and TGT all saw their stocks fall sharply last week as investor concerns around a US consumer slowdown mounted and investors reconsidered just where, if anywhere, you can play "defense" in the current market.

But as Goldman's Chris Hussey writes today, this week, results from companies like DKS, Macy's, JWN, WSM, DLTR, and DG painted a decidedly different picture.

Deep discount retailers Dollar Tree - or rather Dollar 25 Tree - and Dollar General both posted strong results and DLTR raised top-line guidance.

Which isn't surprising: as we discussed in "Middle Class Is Shutting Down As Spending By The Rich Remains Robust" when consumers are trading down - as they are doing now due to Biden's runaway inflation - dollar stores see more business.

As a result, Dollar Tree surged as much as 20% on Thursday, the biggest intraday move since October 2020. Evercore ISI said Dollar Tree's move to a "$1.25 price point" last November from $1 “came in the nick of time" adding that "given the broad-based inflationary cost pressures, the 25% price increase drove material sales and margin upside for both the namesake division and the total company," wrote analyst Michael Montani who also said that while freight, transport, and labor headwinds are real, some of the pressure cited by Target last week was likely company specific.

The analyst concluded that the read-across from DG and DLTR is “favorable,” and it seems that the low-end consumer is “hanging in better than initially thought.” Or rather, the middle-class is getting crushed and it has no choice but to trade down to the cheapest retail outlets.

And with countless shorts having piled up and getting massively squeezed, the S&P 500 Consumer Discretionary Index today has risen as much as 5.6%, its best day since April 2020, as optimism on the health of the consumer returns following a string of better-than-expected earnings reports from retailers.

Top performers in the S5COND index include Dollar Tree, Dollar General, Norwegian Cruise, Caesars Entertainment and Carnival; the Discretionary Index is on pace for its best week since March 18, when the group climbed 9.3%; the index sank 7.4% as Walmart and Target reports spooked investors. The index is still down almost 30% YTD.

"Retail earnings are bullish.... with four blow-outs,” said Vital Knowledge’s Adam Crisafulli, referring to quarterly reports from Williams-Sonoma, Macy’s, Dollar General, and Dollar Tree.  “The overall retail industry is experiencing stark changes and the market is incorrectly conflating these shifts with underlying demand weakness when the actual health of the consumer is much better than it seems,” Crisafulli says, although there are many - this website included - who wholeheartedly disagree with his optimistic view of the US consumer.

Remarkably, thanks to today’s rally, even Burlington Stores, which sank as much as 12% in premarket on disappointing results, is trading up as much as 11% and some say, the rally helped reverse the earlier tumble in NVDA shares.

The discretionary group is also getting a boost from airline operators Southwest and JetBlue, helping travel-related names, while on the economic front, better-than-expected personal consumption (for the revised Q1 GDP print). and jobless claims may be adding to the bullishness according to Bloomberg.

Tyler Durden Thu, 05/26/2022 - 15:00

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Restaurants’ Share Of Food-Dollar Grows To Record 54.9% In April

Restaurants’ Share Of Food-Dollar Grows To Record 54.9% In April

By Nation’s Restaurant News

Restaurants continued to increase their share…

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Restaurants' Share Of Food-Dollar Grows To Record 54.9% In April

By Nation's Restaurant News

Restaurants continued to increase their share of spending in April, reaching 54.9% of the food dollar, according to U.S. Census data released Tuesday. That was a 260-basis-point increase from April last year, when the share was 52.3%, said analyst Mark Kalinowski, president and CEO of New Jersey-based Kalinowski Equity Research LLC.

“Even more impressively, as best as we can tell, this 54.9% market share figure for April 2022 is an all-time monthly high for the U.S. restaurant industry,” Kalinowski said in a note released Tuesday about the April U.S. Census data.

Kalinowski said restaurants, especially multi-unit public chains, were increasing prices but at a more modest rate than retail groceries.

“The key takeaway from this is you have a lot of menu prices going up in the restaurant industry,” he said in an interview.

“And, of course, the fear anytime you're raising your menu prices is that customers will trade down, but that hasn’t happened.”

Kalinowski noted that while restaurant brands were increasing prices, the rate of hikes was less than in grocery prices.

“If you need to eat — and I haven't yet met the person who didn't need to eat — you have got to buy the food from some place unless you're growing it yourself or you have a neighbor who grows it,” he said. “The fact is the restaurant industry offers a lot of convenience. It offers experiences that the grocery stores can't match.

“It is so firmly a part of the American fabric now that Americans don't necessarily want to cut their restaurant spending,” Kalinowski said.

The analyst also noted that larger restaurant brands were being very calculated in how they were raising prices to offset their increased commodity and labor costs.

For example, Kalinowski noted, “McDonald's looks at the food at home inflation and takes that into account with their menu pricing. I would imagine there's definitely a lot of other chains out there that have gotten a little more sophisticated with how they take their menu pricing.”

Those judicious price increases are easier for large, multi-unit chains to institute than for independent restaurants, he noted.

“Independents lack the scale advantages that large chains have,” he said, “so part of the challenge for independence is, in the time of just big commodity cost inflation, how do you battle that. That's not saying it's easy for the large chains — it's hard on everybody just about.”

Over the past two years, he added, the industry has seen the largest shift toward big restaurant brands who are taking increased shares of what is a larger pie.

Census data for April calculated U.S. food services and drinking places posted $83.741 billion in sales, as compared to the April 2022 figure for U.S. grocery stores of $68.906 billion.

Kalinowski said it was intriguing that combined foodservice and drinking place sales with grocery sales had increased significantly from pre-pandemic levels.

“There seems to be meaningfully more spending on food/beverages than there was pre-pandemic,” he said. “The April 2022 combined number of $152.6 billion is 26.4% larger than the April 2019 combined number of $120.7 billion.”

This past April marked the 12th consecutive month for which that number was up more than 10% over the corresponding pre-pandemic monthly number, Kalinowski noted.

“We continue to look for restaurants’ market share in full-year 2022 to be at least one full percentage point higher than the full-year 2021 figure of [positive] 52.7%,” he said.

“All in all, this is good news for restaurant stocks — which tend to be comprised of the very largest restaurant concepts in most cases,” Kalinowski said in his note. “Large concepts have fared better than smaller chains and independents during the pandemic, creating the largest opportunity in decades for market-share gains within the restaurant industry favoring large chains.”

Tyler Durden Thu, 05/26/2022 - 13:40

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Economics

‘Insiders’ Are Buying This Dip

‘Insiders’ Are Buying This Dip

The Nasdaq is in the middle of its worst drawdown since the Lehman crisis and the Dow just suffered its longest…

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'Insiders' Are Buying This Dip

The Nasdaq is in the middle of its worst drawdown since the Lehman crisis and the Dow just suffered its longest losing streak in 99 years.

As that is happening, faith in The Fed is crumbling as Powell faces the central bankers' nemesis of stagflation... and all in an election year (threatening the confidence in The Fed's independence should it falter from its path of uber-hawkishness).

According to the latest BofA Fund Manager Survey, the grim 'market' has sent investors reeling with those equity funds tracked by EPFR Global suffering six straight weeks of outflows (the longest stretch of withdrawals since 2019), and cash levels among investors soaring to their highest level since September 2001.

Additionally, the BofA survey also showed that technology stocks are in the 'biggest short' since 2006.

The 'proverbial' dip-buyer appears to have abandoned hope as the strike on any Fed Put (at which Powell will fold like a cheap lawn chair over the pain) gets marked lower and lower.

But...

There is one group apparently, that is willing to dip a toe in the capital market deadpool - corporate insiders.

As Bloomberg reports, according to data compiled by the Washington Service, more than 1,100 corporate executives and officers have snapped up shares of their own firms in May, poised to exceed the number of sellers for the first month since March 2020 marked the pandemic trough two years ago.

The ratio has surged to 1.04 this month from 0.43 in April.

Notably, the insider buy-sell ratio also jumped in August 2015 and late 2018, with the former preceding a market bottom and the latter coinciding with one.

“It is a function of investors functioning at the '30,000 foot level' or 'macro' whereas insiders are functioning at the 'boots on the ground', company-fundamentals level,” said Craig Callahan, chief executive officer at Icon Advisers Inc. and author of 'Unloved Bull Markets'.

“We believe the company-fundamentals view is usually correct.”

Nicholas Colas, co-founder of DataTrek Research, is not as confident:

“All we know for sure is that the valuation of any stock or the entire market hinges on whether investor confidence in future cash flows is rising or falling. At present, confidence is falling,” he wrote in a recent note.

“This is not because stocks expect a recession. Rather, it is because the range of possible S&P 500 earnings power runs in a wide channel and can become wider still.”

Starbucks' Interim Chief Executive Officer Howard Schultz and Intel CEO Patrick Gelsinger are among corporate insiders who scooped up their own stock amid the latest market rout that took the S&P 500 to the brink of a bear market.

With their share prices plunging, we can't help but wonder if this 'buying' is mere virtue-signaling so that the board won't fire them for their absymal loss of market cap? 

Tyler Durden Thu, 05/26/2022 - 13:20

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