COVID-19 has recently made its way back into the spotlight as daily infections have risen sharply in parts of China.

Several major cities in China have placed new restrictions on business activity to combat the spread of the Omicron variant.

So with COVID-19 back in the headlines, I’m staying familiar with several small-cap names that might provide opportunities as a result.

In trading, it pays to be prepared.

If opportunity materializes, I will act without hesitation because I am prepared for various scenarios and outcomes.

If the opportunity doesn’t materialize, gang, I’ll still be better off. That’s because I would have furthered my stock market knowledge by taking a closer look and researching several stocks.

In that sense, it’s a win-win.

Alright, gang, so with cases rising in China, here are my top three COVID-19 stocks on watch:

VBI Vaccines (VBIV)

(source: finviz.com)

Although the above chart doesn’t have one of my favorite chart patterns, it finds itself trading well below its average target price and has upcoming COVID19 data expected around the end of Q1 2022.

Year to date, VBIV has certainly not had the best start to the year. The stock is down 45.73% YTD, according to Finviz.

The average target price of the stock, set by analysts covering the name, is considerably higher than where the stock is currently trading at, though.

Currently, the stock has an average target price of $6.67, according to Finviz.

So with cases on the rise in China and VBIV expected to release data soon, I’m keeping this stock on the watch for a possible reversal.

I’ll be watching to see if the volume can increase and if the stock can reclaim the 20d MA and make a higher low.

ARCA Biopharma (ABIO)

ABIO, unlike VBIV, has one of my favorite chart patterns.

Can you guess which one?

If you spotted the higher high higher low pattern, you guessed right!

I like how the stock recently broke the downward channel and consolidated above the 20d and 50d MA.

Not only does this stock have one of my favorite patterns, but it ALSO has an upcoming catalyst.

At the end of the month, the company is expected to report data from its phase 2b clinical trial evaluating rNAPc2 as a potential treatment for patients hospitalized with COVID-19.

So I’ll be paying close attention to the price action of ABIO and looking to see whether or not this stock can continue to base above the MA’s and continue to make higher highs and lows.

Last but not least: InflaRx (IFRX)

Just like the names mentioned above, IFRX has an upcoming catalyst.

The company is expected to discuss data from its phase 2a study at Boston’s 2022 AAD meeting, held between March 25 – 29, 2022.

IFRX, like ABIO, hasn’t had the best start to the year, as the stock is down around 55% year to date, according to Finviz.

Like ABIO, the target price of IFRX is considerably higher than where the stock closed yesterday.

IFRX has a target price of $9.58, according to Finviz.

Going forward, I will be looking to see whether or not the stock can reclaim prior support at $2.50 and firm up.

If the volume increases, along with a $2.50 reclaim and price holding above the 20d MA, I might be interested in taking an even closer look at IFRX and entering a trade.

The Bottom Line

There you have it, gang.

These are the three COVID-19 related stocks I am currently watching as cases are rising in China, opening up the possibility of increased volatility in COVID-related stocks.

As I mentioned, there is no guarantee that any opportunities will arise in these stocks. 

However, there is no downside to being prepared!