This has been a very interesting week with Citi Group (C) gaining about 20% and also other financials like Bank of America (BAC) and American Intl’ Group (AIG) running wild.

Here is a list of stocks to watch tomorrow, March 11, 2010:

Citi Group (C: 4.10 -0.49%): Citi is obviously the market favorite right now. It has been up all week. There are couple resistances around $4.30-$4.35 area and if it can break through that then it might run up to $3.65-$3.70. Here is my worry: The fundamentals of this company are still not that good and the stock is moving only based on speculations. What will happen when the government starts selling its massive pile of Citi stocks? The selling pressure will bring down the prices, but how much? Please think of these questions carefully before investing in Citi.

American Intl Group, (AIG: 38.47 -1.28%) – This stock is having a wild ride. It was up about 3% when it opened today, but closed 3% down. Watch the momentum tomorrow and probably day trading might be the best way to make some quick bucks.

Bank of America. (BAC: 14.04 +0.07%) – Same story as other financials, but it seemed a little weak today as if it ran out of gas. Still, it should be an interesting watch tomorrow.

Penny Stocks to Watch Tomorrow:

TerreStar Corporation (TSTR: 0.70 +8.83%) – This stock went crazy without any news. Watch out for this penny stock tomorrow.

Cell Therapeutics Inc. (CTIC: 0.392 -2.00%)
Zanett Inc. (ZANE: 1.73 -1.70%)
SIRIUS XM Radio Inc. (SIRI: 1.03 +4.04%)
Freddie Mac (FRE: 0.00 N/A)
Fannie Mae (FNM: 0.00 N/A) – Fannie and Freddie never give up. These stocks are still holding up. I only recommend these for day-trading though, depending on the momentum.

Here is the watch list of penny stocks for Jan 11, 2010

Pacific Ethanol, Inc. (PEIX: 0.58 +0.02%)
Cyclacel Pharmaceuticals, Inc. (CYCC: 1.72 +8.18%)
Cell Therapeutics, Inc. (CTIC: 0.392 -2.00%)
Adventrx Pharmaceuticals, Inc. (ANX: 2.00 +8.70%)
Adeona Pharmaceuticals, Inc. (AEN: 0.9145 -0.60%)
CRM Holdings Ltd. (CRMH: 0.00 N/A)
YRC Worldwide Inc. (YRCW: 0.395 +1.54%)
Targeted Genetics Corp. (TGEN: 0.00 N/A)
MTR Gaming Group, Inc. (MNTG: 2.15 +0.94%)
OpenTV Corp. (OPTV: 0.00 N/A)
Vonage Holdings Corporation (VG: 2.45 +2.51%)
GenVec Inc. (GNVC: 0.56 +5.66%)

Some define penny stocks as stocks that are trading under one dollar per share while some say they trade under five dollars. No matter what the exact definition is, I believe you get the idea that price per share of a penny stock is low. They are cheaper to buy compared to “normal” stocks, but the associated risk is also significantly higher.
They are not traded in the major stock exchanges in US such as NYSE, NASDAQ or AMEX, hence the reason that the daily trade volume is very low. Although, some penny stocks do have high daily trade volume. Penny stocks generally have low market capitalization and are traded over the counter (OTC) through service such as the Pink Sheets or the OTC bulletin board. Penny stocks are sometimes also referred to as microcap stocks, small caps or nano caps.
These are the things that comes to my mind when they say penny stocks.

1. There is a reason they are selling for pennies. The company is not doing well and it is moving towards bankruptcy. Investors do not expect any return or benefits from this company and if you invest here you will loose your money.

2. It is a new company which just began trading publicly. Since it is a new start up, it is hard to tell how they will perform. Before investing, you might look at their assets, both physical and intellectual to see what kind of services or products you might expect from them in the future. You might also check how strong their competition is and if you think they will be able to get a significant market share for their products or services.

3. The third and probably the best kind of companies to invest in are companies that are undervalued for no apparent reason other than the investors’ lack of trust and/or fear. For example, Citi (C) became a penny stock for a day or two because of the wall street meltdown. Those who were smart enough to load their bags that day saw an extremely generous return for their investment.