TM editors' note: This article discusses a penny stock and/or microcap. Such stocks are easily manipulated; do your own careful due diligence. 

Biotechs are still some of the best penny stocks to watch for March 2020…

I’ve been talking about biotechs all year. In the first two months of 2020, we’ve seen some crazy biotech runs.

Global markets are shaky because of the COVID-19 (aka Wuhan coronavirus). The virus is disrupting international supply chains and putting a strain on international trade.

The good news? Penny stocks don’t follow the overall market. While the S&P 500 had one of its worst weeks in history, penny stock biotechs were soaring.

But don’t blindly open up your brokerage account and buy a biotech stock under $5. You need to have a plan and do your research.

That said, let’s get on with…

Top 5 Penny Stocks to Watch March 2020

Co-Diagnostics, Inc. (NASDAQ: CODX)

Co-Diagnostics is a molecular diagnostics company that manufactures and sells reagents. Reagents are a critical part of diagnostic testing.

Since its IPO, CODX hasn’t seen much wild volatility. Then the COVID-19 outbreak happened.

CODX was one of the first companies to respond. Less than a month after the initial outbreak, Co-Diagnostics CEO Dwight Egan announced a new test for COVID-19.

He expected the test to face several challenges, then the press release launched CODX onto the public stage.

A stream of press releases followed…

The most notable included regulatory clearance of its COVID-19 test and the approval of a CE marking registration. This company had more press releases last month than any other company on my watchlist.

CODX had numerous offerings ranging from $5–$10 million. For most penny stocks, that would cause a huge drop in price. But the hype held the stock up.

Take a look at the three-month chart:

CODX chart: 3-month, 1-day candle — courtesy of StocksToTrade.com

Short sellers lost big on this play. I’m not the best at playing these wild short squeezes, but many students nailed the plays. It’s been a while since we’ve seen a spike like this…

CODX chart: 10-day, 30-minute candle — courtesy of StocksToTrade.com

Before CODX went full supernova, I bought it on January 29. It had pulled off its highs and released a fresh press release that morning about its COVID-19 test. It didn’t spike as much as I thought, but I still locked in a solid 10%.

Unlike OTC stocks, the virus sector momentum is choppy. I’m not interested in buying strength on CODX … Virus news (good or bad) can move the stock FAST. Ideally, these stocks pull hard off their highs and give me a morning panic to buy.

Alpha Pro Tech, Ltd. (NYSE: APT)

Alpha Pro Tech is another coronavirus play. The company has three business segments: building supply, disposable protective apparel, and infection control.

APT trades on the NYSE. It’s more established than the sketchy penny stocks I typically trade. The disposable apparel divisions have had a lot of attention in the last several months. It produces shoe covers, lab coats, gowns, coveralls, hoods, and other products.

The infection control segment offers face masks and eye shields, which are in short supply right now.

The APT three-month chart speaks for itself…

APT chart: 3-month, 1-day candle — courtesy of StocksToTrade.com

The stock has gone on a wild run from the low $3 range to a high of $41.59 on February 27. Like CODX, Alpha Pro Tech released several press releases about its coronavirus involvement.

The company didn’t initially release news about it, but many organizations picked up on its spike ability. At the end of January, both Zacks and Benzinga published articles discussing the demand for APT’s protective face masks on coronavirus scares.

A week after CODX started its run, APT released its first COVID-19 press release. That announced its increased production of N-95 face masks. Since then, company reps have been on major financial news outlets. It’s getting a lot of public exposure.

And as COVID-19 started to spread to the U.S., APT went supernova.

APT chart: 10-day, 30-minute candle — courtesy of StocksToTrade.com

My plan for APT is the same as CODX. I’m not comfortable buying strength on stocks that already went supernova. Instead, I’ll wait for large panics after the open.

Stocks trading in sectors tend to last longer than most traders expect. And if COVID-19 continues to spread, both APT and CODX could see new highs.

Holloman Energy Corporation (OTC: HENC)

OTC stocks can be sketchy — I would never invest in them. Holloman Energy is one of the sketchiest OTCs running right now. It’s also provided some great opportunities. If you look at the company description on the OTC markets website, it simply states:

“Holloman Energy explores for oil and gas in Australia.”

Yeah. Here’s the thing … most stocks trading on the OTC exchanges are fundamentally terrible. You gotta know this if you want to trade OTC stocks. Don’t hold and hope — most of these stocks go nowhere.

Despite the lack of news, HENC had a supernova run in February…

HENC chart: 3-month, 1-day candle — courtesy of StocksToTrade.com

HENC is fading … But I’ll keep it on my radar for any massive morning panics or potential first green days.

HENC chart: 15-day, 30-minute candle — courtesy of StocksToTrade.com

Traders tend to remember stocks that go supernova. If HENC starts trading massive volume again or has a press release … there could be a nice bounce.

SPO Global Inc. (OTC: SPOM)

SPO Global is a holding company that acquires small businesses. It provides financial advice and guidance to help them reach their full potential. The main holding, Wine On Tap, Inc, has made several acquisitions, like Wine Stream Inc., to improve its intellectual property.

SPOM has very little trading history. Out of the blue on February 13, the company issued a press release about a new merger between SPO Global and Gerpang Healthcare Group.

Mergers are a common catalyst in the OTC market. But what caught my attention was the merger with a healthcare group from China in the middle of the COVID-19 outbreak.

The connection was speculative, but the stock spiked from 3 cents to a high of 68 cents.

SPOM chart: 3-month, 1-day candle — courtesy of StocksToTrade.com

OTC penny stocks trend better than most stocks on the Nasdaq or NYSE exchanges. That’s why I love them. So do many of my top students.

The daily chart above shows the crazy volume that poured into SPOM after the press release. Any time a stock trades substantially higher volume than previous days, I’m interested.

SPOM chart: 15-day, 30-minute candle — courtesy of StocksToTrade.com

I bought SPOM on February 19 when it showed highs of going supernova. I bought a dip off its highs, but the stock didn’t bounce like I expected.

The spread was also nasty, so I cut my losses quickly for a breakeven trade.

SPOM has yet to have a strong first green day since its pullback. Stocks don’t have to have a strong first green day. But it’s common once they pull back from their highs for multiple days.

If SPOM issues another press release and volume returns, I’ll be watching.

TOMI Environmental Solutions, Inc. (OTC: TOMZ)

TOMI Environmental Solutions is a global company that specializes in bacteria decontamination and infectious disease control. Its eco-friendly products are made from hydrogen peroxide.

These products are currently used in a number of places — schools, office buildings, cruise ships, restaurants, and athletic facilities.

TOMZ is one of the hottest stocks in the OTC market. And it’s well-positioned for the COVID-19 pandemic…

A week after CODX and APT began releasing news about COVID-19, TOMI joined in. It announced its attempt to prepare for the outbreak.

It spiked throughout February. It started to go supernova after announcing its products are the “disinfection industry standard in China.”

Then a month later, it had another press release about its global expansion in the fight against COVID-19. Here’s TOMZ from the start of its run…

TOMZ chart: 3-month, 1-day candle — courtesy of StocksToTrade.com

I missed the breakout… But that happens when you’re traveling and building schools around the world.

I’d be interested in TOMZ any afternoon it holds near its daily highs. I’ll look for a strong close, a possible gap up, and a morning spike. Like how it traded on February 27…

TOMZ chart: 5-day, 15-minute candle — courtesy of StocksToTrade.com

Otherwise, my main focus will be on morning panics like the one on March 3.

I’m more comfortable buying dips. The risk is lower. So I took a larger size on this morning panic — filling my shares at an average of 89 cents. TOMZ didn’t bounce huge, but I locked in an easy 11% gain in a few minutes.

The Bottom Line 

My strategies involve trading some of the fastest moving, most volatile stocks in the entire market. That said, some of the stocks on this list could be completely out of play by the time you read this.

The point is… don’t use this list as a signal to buy any stock. I don’t put stocks on my watchlist based on fundamentals. It’s not that I don’t look at fundamentals. But I’m not gonna lie to you. (Like so many other ‘top penny stocks to watch’ articles.) I won’t tell you to buy and hold stock because “the market is undervaluing this stock.”

Frankly, that kind of thinking with penny stocks is total BS. Most penny stocks fail. Just like most traders — roughly 90% — lose. So use this list as a tool for learning to create your own watchlist.