Profit from the volatility and potential rebounds of stocks priced below $1, often referred to as "penny stocks," while managing delisting risk.
Delisting Pressure
Stocks trading below $1 for extended periods risk NASDAQ delisting. Companies often act to boost stock price through:
Positive news announcements.
Mergers, buybacks, or reverse stock splits.
Even small price moves (e.g., $0.20-$0.30) can result in significant percentage gains.
Liquidity
Stick to sub-$1 stocks with sufficient volume (at least 1M shares/day) to avoid illiquid trades.
Diversify
Spread risk by trading multiple setups instead of concentrating capital in one position.
Applying the Strategy to HOVR
Situation: HOVR is trading below $1 on NASDAQ. Company faces potential delisting pressure but shows technical signs of a rebound.
Entry: Entered using a buy stop order around $0.48 Stop Loss: Set at $0.30 to limit downside risk. Take Profit: Target $1 or higher, psychological resistance.
This strategy capitalizes on the technical and fundamental nuances of sub-$1 stocks while adhering to disciplined risk management.