Zhongchao (NASDAQ:ZCMD) stock is rising higher on Tuesday alongside heavy pre-market trading of the Chinese healthcare information, education and training services company’s shares this morning.
This has more than 3.2 million shares of ZCMD stock changing hands during pre-market hours. That’s already well above the company’s daily average trading volume of only about 5,500 shares.
There’s no clear news explaining the sudden interest in ZCMD stock. However, traders will note that it went through a 1-for-10 reverse stock split last week. It’s also worth pointing out that the company’s float is around 1.3 million shares.
Another key thing to keep in mind about ZCMD stock is its penny-stock status. This comes from its low daily average trading volume, a prior closing price of $3.17 per share and its market capitalization of around $7 million.
Why This Matters to ZCMD Stock
Being a penny stock opens Zhongchao up to manipulation from certain traders. That’s doubly true outside of normal trading hours. The low float of the stock with this heavy trading is another sign that a pump and dump or short squeeze might be happening right now.
All of this is to say that ZCMD is a risky investment right now. While the shares are currently up, it might not be long before they come crashing back down.
ZCMD stock is up 14.5% as of Tuesday morning.
Investors can find more of the most recent stock market news below!
We have all of the hottest stock market stories worth reading about on Tuesday! That includes the biggest pre-market stock movers this morning, the latest news covering stocks falling and more. All of that is ready to go at the following links!
More Tuesday Stock Market News
- Today’s Biggest Pre-Market Stock Movers: 10 Top Gainers and Losers on Tuesday
- Why Are Stocks Down Today?
- Craig-Hallum Just Slashed Its Price Target on Plug Power (PLUG) Stock
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
