Recently we've seen a lot of true penny stock biotechs spiking. Some traders think that's a great thing, but let me explain why they're not my favorite…
First, I don't like true penny stocks. (Stocks that trade under $1.)
Second, I don't love sketchy biotechs, especially on their first green day.
These sketchy companies are known to drop offerings to take advantage of their increased stock price. And that usually sends the stock off a cliff. No thanks.
It was spiking again in premarket on Friday. But here's why I didn't like it…
I just can't get excited about these true biotech penny stocks.
Most traders won't short true penny stocks because of the $2.50 rule. And while there are opportunities to catch good percent gains on low-priced stocks, they just don't have the same range as low-float stocks.
That limits their ability to squeeze and get parabolic moves.
Now, with hindsight, I can't really say Evofem Biosciences, Inc. (NASDAQ: EVFM) is the best. Ultimately, I didn't get the move I was hoping for. But it was one of my top watches on Friday…
I thought it could break $1.20 on Thursday afternoon. It tried multiple times but it couldn't break out. So I wanted that move on Friday.
Why did I like EVFM more than the other two true biotech penny stocks?
You could argue that EVFM is also a true penny stock. But here's my counterargument to that…
EVFM has traded 1.2 billion shares since its big spike following the supreme court news headlines on June 24. After the initial news, it had two days of consecutive gap-ups. And it's still hanging around…
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