18 Dec

Start Your Engines; 5 Small Cap Stocks Under $3 Heating Up

by

Running with the bulls can be an effective way to swing trade as long as you can handle volatility but honestly, you wouldn’t be reading this right now if you didn’t like the burn and turn!

These small cap stocks are all on fire and many are likely to continue Tuesday! Most of the time I’m accumulating oversold stocks and selling the bounce for 5-10% rinse and repeat but I’ve been known to ride the bull from time to time as well. When accumulating oversold and continuation patterns it could take as much as a week to deliver 5-10% whereas a breakout bull can deliver those gains in a day, but they can fall just as fast too so make sure you know what you’re doing and looking at. The key is being able to read the momentum and technical analysis… here’s what I’m watching Tuesday.

Geron (NASDAQ:GERN) is a biopharmaceutical company that develops therapies for cancer. Its clinical development product candidates include Imetelstat, a telomerase inhibitor, which is in Phase II clinical trials for the treatment of metastatic breast cancer, advanced non-small cell lung cancer, thrombocythemia, and myeloma. GERN stock market cap is $222 million with a Beta of 2.02. They have $101 million cash and $0 debt, the per share is $.77 with 131 million shares outstanding and 128 million in the float. GERN stock ran 13% on Monday closing just off the high and if it breaks $1.80 resistance Tuesday $2.10 would be the next area of technical resistance. The short interest is light here with 8 days to cover and 4% of the float short.

Orbitz Worldwide (NYSE:OWW) operates as an online travel company worldwide. It enables leisure and business travelers to search for and book a range of travel products and services. OWW stock market cap is $275 million with a Beta of outside my wheelhouse of .84, I like a Beta over $2 for juicy volatility. They have $159 million cash and $440 million debt, the per share is $1.45 with 105 million shares outstanding and 23 million in the float. OWW stock ran 7% Monday closing just off the high and if it breaks $2.70 resistance Tuesday $3 would be the next areas of technical resistance. The short interest is light here with 9 days to cover and 7% of the float short.

Metalico (AMEX:MEA) engages in scrap metal recycling, platinum group and minor metals recycling, and lead metal products fabrication activities primarily in the United States. MEA stock market cap is juicy at $83 million with an even sweeter Beta of 2.72. They’re thin on cash with $4.5 million and $132 million debt, the per share is $.10 but their book value is $3.94 with $48 million shares outstanding and 41 million in the float. MEA stock ran big Monday up 15% closing just off the highs and could really open up to $2.20 Tuesday if $1.80 resistance falls. No help from the shorts here though, MEA’s short interest is 5 days to cover with 3% of the float short.

Smith Micro Software (NASDAQ:SMSI) provides software and services that simplify, secure, and enhance the mobile experience. SMSI stock market cap is just inside the small cap category at $53 million with a Beta of 2.13. They have $27 million cash and $0 debt, the per share is $.75 with 36 million shares outstanding and 28 million in the float. SMSI stock ran a monster 18% Monday closing just off the highs and if  $1.52 breaks Tuesday I’d be looking for a move to $1.76 with some chop around $1.68. There’s very little short interest reported here with 3 days to cover and less than 1% of the float short.

Avalon Rare Metals (AMEX:AVL) engages in the exploration and development of rare metals and minerals in Canada. The company primarily focuses on exploring for rare earth elements, such as neodymium, terbium, and dysprosium; and other rare metals and minerals, including lithium, tantalum, niobium, cesium, indium, gallium, and zirconium, as well as tin. AVL stock market cap is right in my wheel house at $150 million and like a bad infomercial it gets better with a juicy Beta of 3.81! They have $39 million cash and $0 debt, the per share is $.38, book $1.15 with 104 million shares outstanding and 101 million in the float. Of the stocks featured in this list it ran the least up 3% Monday but the continuation pattern is strong and I think a test of $1.60 is coming, chop and settle at $1.80. The shorts aren’t interested here either with 6 days to cover and 2% betting against the company.

Disclaimer: I have no positions in any stocks mentioned, but may initiate a long or short position over the next 72 hours.

1 Comment

  1. lamont

    checkout AUMN

    Reply

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