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12 Best Stocks For Day Trading

In this piece, we will take a look at the 12 Best Stocks For Day Trading. If you want to skip our introduction to trading indicators and the economic climate, then check out 5 Best Stocks For Day Trading.

The modern day stock market is significantly different from the one of the early 1900s. These days, all transactions on the market are digitally linked, which makes traders exchange millions of shares daily. These trading patterns create new strategies for investing in markets, as part of an approach that is dubbed technical trading. Technical trading looks at the patterns behind transactions that determine a stock's daily price. Share prices are a mix of bid and ask prices, and their levels over a longer time period are analyzed in terms of averages and other indicators that are part of the technical approach.

Moving averages of share prices and the volume of the shares that are trading at a given time period are the two fundamental indicators that are used in technical trading. They are joined by momentum, volume, and volatility indicators, and the fundamental principle behind this approach is that there are wider patterns that are kicked off by market events that can open up the opportunity for profit.

As a simple example, consider the example of a hypothetical company whose stock price drops from $10 to $5 in a week after having previously gained $6 over the year. Depending on the movement of the share price, the number of days that the shares gained and lost, and the price moving averages allow a technical trader to determine whether the new $5 share price is a result of market sentiment overreacting or a shift in the firm's fundamentals.

Another key technical indicator is volatility. Volatility is measured through several mathematical formulas, and the principle behind it measures the variation in a security's daily prices over a longer time period. Volatility is also often dubbed as the market's 'fear gauge' as sudden dips and rises in a security's prices indicate emotions at play instead of a fundamental based conviction driving a buying or selling position.

The current market and economic climate has also created news about fear. The stock market is currently struggling to sustain its massive gains of the first half of 2023, and while these gains are still substantial for major indexes (and big tech stocks in particular) the past few months have seen investors flee as worries about high interest rates, their effects on the economy, and a shaky global environment dominate the narrative.

One of the most common indicators of stock market volatility is the Chicago Board Options Exchange's CBOE Volatility Index, often called the VIX. October is off to a strong start for the stock market due to a major selloff that took place due to bonds shedding their value as economic indicators such as economic growth and the labor market signaled to investors that interest rates would stay higher than expected. Volatility in the market, specifically in the S&P500 is measured through the VIX and futures of the VIX. Futures that are expected to expire later are typically priced lower since the future is 'generally' more volatile than today. However, during the middle of the first week of trading in October, the VIX went on and soared to 19.20 while its three month futures peaked at a lower level, showing that investors were more uncertain of the current environment than the future.

The volatility index curve typically inverts during times of extreme pressure. In 2023, which has been marked for record gains for the NASDAQ 100 and stellar performance by most indexes, the curve inverted in March during a time of extreme uncertainty as multiple big banks failed in quick succession. However, after March, stocks soared and some fears were proven to be unwarranted.

With volatility having soared to levels it was last at during the tail end of the second quarter, we made a list of the best stocks for day trading. The top three are Gracell Biotechnologies Inc. (NASDAQ:GRCL), Gritstone bio, Inc. (NASDAQ:GRTS), and Ebix, Inc. (NASDAQ:EBIX).

The9 Limited (NASDAQ:NCTY)
The9 Limited (NASDAQ:NCTY)

Image by Steve Buissinne from Pixabay

Our Methodology

To compile our list of the best stocks for day trading, we first made a list of the stocks with the greatest weekly price volatility and weekly share price gains. Then, the number of hedge funds that had bought their shares during this year's June quarter was determined through Insider Monkey's survey of 910 hedge funds, and the stocks with the highest number of hedge fund investors were chosen as the best stocks for day trading.

12 Best Stocks For Day Trading

12. The9 Limited (NASDAQ:NCTY)

One Week Volatility: 22.03%

Number of Hedge Fund Investors In Q2 2023: 3

The9 Limited (NASDAQ:NCTY) is a Chinese firm that is headquartered in Shanghai, China. The firm provides online gaming, cryptocurrency mining, and other services. Nearly half of the firm's shares are owned by retail investors, and the shares have had a rough start to October by nearly halving over the September close.

As of Q2 2023 end, three out of the 910 hedge funds part of Insider Monkey's database had held a stake in The9 Limited (NASDAQ:NCTY). Ken Griffin's Citadel Investment Group is the biggest shareholder among these since it owns 78,323 shares that are worth $575,200.

The9 Limited (NASDAQ:NCTY) joins Gritstone bio, Inc. (NASDAQ:GRTS), Gracell Biotechnologies Inc. (NASDAQ:GRCL), and Ebix, Inc. (NASDAQ:EBIX) in our list of the top stocks for day trading.

11. Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)

One Week Volatility: 27.40%

Number of Hedge Fund Investors In Q2 2023: 3

Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR) is a real estate investment trust headquartered in Virginia. The firm focuses on retail and grocery stores, providing it with a steady stream of income during weak economic times. Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)'s second quarter results saw the firm report $6.3 million in operating income but this was converted into a loss due to high interest expenses.

By the end of this year's second quarter, three out of the 910 hedge funds surveyed by Insider Monkey had invested in the company. Out of these, Wheeler Real Estate Investment Trust, Inc. (NASDAQ:WHLR)'s largest investor is Parsa Kiai's Steamboat Capital Partners due to its $4.8 million stake.

10. OceanPal Inc. (NASDAQ:OP)

One Week Volatility: 27.83%

Number of Hedge Fund Investors In Q2 2023: 3

OceanPal Inc. (NASDAQ:OP) is a dry bulk company with a five ship fleet. The firm is headquartered in Greece, and the nature of its services leaves the company vulnerable to any downswings in the global economy due to a slowdown in demand for commodities such as grain and iron.

After digging through 910 hedge funds for their June quarter of 2023 investments, Insider Monkey discovered that three had bought and invested in OceanPal Inc. (NASDAQ:OP)'s shares. Hal Mintz's Sabby Capital is the biggest stakeholder since it owns $194,921 worth of shares.

9. Axcella Health Inc. (NASDAQ:AXLA)

One Week Volatility: 34.16%

Number of Hedge Fund Investors In Q2 2023: 3

Axcella Health Inc. (NASDAQ:AXLA) is a small biotechnology company that develops treatments for COVID and liver diseases. While it has beaten analyst EPS estimates in three of its four latest quarters, all these have been loss making periods and a reduction in research expenses has contributed to the beat.

Insider Monkey took a look at 910 hedge fund portfolios for this year's second quarter and discovered that three had bought the company's shares. Israel Englander's Millennium Management is Axcella Health Inc. (NASDAQ:AXLA)'s largest shareholder since it owns 72,281 shares.

8. Bionomics Limited (NASDAQ:BNOX)

One Week Volatility: 55.30%

Number of Hedge Fund Investors In Q2 2023: 3

Bionomics Limited (NASDAQ:BNOX) is an Australian biotechnology company that develops treatments for cancer and nervous system diseases. It is one of the few stocks on our list that is rated as Strong Buy on average by analysts, who have also penned in a $5.5 share price upside over the current price of $3.53.

During this year's second quarter, three out of the 910 hedge funds part of Insider Monkey's database had bought Bionomics Limited (NASDAQ:BNOX)'s shares.

7. Femasys Inc. (NASDAQ:FEMY)

One Week Volatility: 59.38%

Number of Hedge Fund Investors In Q2 2023: 3

Femasys Inc. (NASDAQ:FEMY) is an American healthcare company that provides healthcare products and services tailored to women. Analysts have penned in a $7 share price upside to the stock over the current $2.3 price and the stock is rated Buy on average.

As of June 2023, three hedge funds out of the 910 tracked by Insider Monkey had invested in Femasys Inc. (NASDAQ:FEMY). Out of these, the biggest stakeholder is Prashanth Jayaram's Tri Locum Partners due to a stake worth $56,970.

6. Blue Ridge Bankshares, Inc. (NYSE:BRBS)

One Week Volatility: 21.18%

Number of Hedge Fund Investors In Q2 2023: 5

Blue Ridge Bankshares, Inc. (NYSE:BRBS) is a regional bank headquartered in Charlottesville, Virginia. The stock is down 86% year to date, as the firm has struggled with asset quality leading to loss of interest income and other problems.

By the end of this year's second quarter, five out of the 910 hedge funds part of Insider Monkey's database had held a stake in the company. Blue Ridge Bankshares, Inc. (NYSE:BRBS)'s largest investor is Phil Stone's Fourthstone LLC since it owns 1.3 million shares that are worth $11.8 million.

Gracell Biotechnologies Inc. (NASDAQ:GRCL), Blue Ridge Bankshares, Inc. (NYSE:BRBS), Gritstone bio, Inc. (NASDAQ:GRTS), and Ebix, Inc. (NASDAQ:EBIX) are some best stocks for day trading.

Click here to continue reading and check out 5 Best Stocks For Day Trading.

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Disclosure: None. 12 Best Stocks For Day Trading is originally published on Insider Monkey.

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