#IPOs – no shares to ride for $UBER and $LYFT yet

Since BYND, with a big jump, is making noise again today, thought it’d be a good time to take a quick look at recent IPOs still in play as per this criteria:

Buying IPOs For Dummies

See the charts below. Each is set at a $10K investment to show the percentage as well as dollar gain for each stock in the white flag on the lower right of each chart — for example, SWAV is up 99% since its IPO buy, SOLY up 115%, and so on.

UBER and LYFT have not climbed above the hype on each of their first days of trading so they are not long investments. At best, LYFT particularly is a short.

Of note, if APLT holds its gain for today, it will be a buy either at the close today or on tomorrow’s open.

(click on the chart panel for a larger view)

$LYFT gets no lift on first earning report since IPO

LYFT, the ride-share biggie, is a perfect example of not buying into the hype surrounding an IPO.

LYFT came public on 3/29 and dropped almost immediately in on its opening bar, then gaped down the next day (see the charts below). Eventually, it settle down to move sideways until…today. It’s earnings report was terrible, losing $9 a share, more than a billion dollars, despite an increase in revenue and market share. And it had to announce on a day when its drivers are on strike with its biggest competitor coming public Friday.

The stock dropped nearly 11%

If one is an investor, none of this should matter. As outlined in this link below, investors should not even be long the stock until all fundamental and technical finally shake out, if they ever do. (Keep all this in mind also for the upcoming UBER IPO.)


Buying IPOs For Dummies

These IPOs are difficult to short in the initial stages, but traders on biggies like LYFT have options to play with. LYFT’s options came to market five days after the stock’s IPO day (see the charts below). And there is where the downside can be played. The LYFT May monthly 75 puts bought on its own “IPO day”, using the same criteria outlined for the stock in the link above,is now up approximately 150%.

Now that is uplifting.

(click on the chart for a larger view)

#IPOs – when “dummies” should take the trade

And on the second day of trading an IPO, dummies discover why they should never buy on the first day of trading.

This is based on suggestion in this post:

Buying IPOs For Dummies

Don’t mean to use the term “dummies” in a derogatory fashion but sometimes it’s hard not to.

Over and over again, unless one is a real insider or being bribed for doing something else, or running some money-laundering scam that’s beyond me, anyone giving in to the hype surrounding an initial public stocks offering and buying before seeing which way it is going when its first day is done is plain and simple a dummy.

As said the link, this is one of the easiest trades in the market if one has persistence to follow an IPO and the discipline to wait for it reveal its direction before buying. Initially these stocks are difficult, if not impossible to short, so we’re talking only the long side here.

The keys to taking a position in a recent IPO are the high and the low in price on the first trading day (its “IPO day”). It is a buy on a close above the high of the IPO day. After the buy the high of that day becomes the stop loss level or the low of the IPO day becomes the stop-loss level depending on any individual trader’s or investor’s risk tolerance.

The trade is as simple as that.

See the chart panel below for examples. The top row of charts are recent successful IPO investments using this system. Each is set at a $10,000 investment to show both the money and percentage gains (the white flags on the lower right of each chart). As of today’s close, SWAV is up 46%, PINS up 11%, ZM .98% and SOLY up 133%.

In the bottom row are four IPOs from Friday which should not be in anyone’s portfolio…not yet at least – these second days are, as I said above, when dummies learn they never shoulda never bought any of these Friday.

Going forward, RRBI will be a buy above 58 and not before; SCPL above 18.75, ATIF above 5.10, and YJ above 18.20.

Simple as that.

(click on the chart panel for a larger view)

#Stocks – Recent IPOs for the long term

This is a reminder that this is the easiest trade in the market and a followup to recent IPOs bought for the long term as per this strategy:

Buying IPOs For Dummies

The high and low of the stock’s price on its first day of trading creates the levels at which to buy and sell. The basic strategy is to buy on a close above the high of its IPO day, using either that price or the low of the first day as the stop loss to protect capital.

Presumably, investors in IPOs want to buy and hold for the long term.

Below, are the charts of a selection of IPOs since February — GOSS, SOLY, TCRR, FHL, SWAV — that have signaled buys and continue to advance or at least hold firm. As a group, they happen to be up 18% in less than two months, led by SOLY up 59% and GOSS 19% individually.

Every time an IPO is launched, like the much anticipated upcoming ones for Lyft and Uber, it’s just a matter of paying attention to the first day’s price levels to make the trade. There is a lot of hype around each launch but one must have the discipline to wait for the stock to reveal its likely long-term direction. Some of these stocks go straight down from day one (a lot actually) but the stock of every major company in market history eventually made a move above the high of its IPO day and many of those never looked back.

With persistence, experience and discipline, it is the easiest and safest way to invest for the long term in the market.

(click on the chart panel for a larger view)

#IPOs for “Dummies” – $GOSS $ALEC $HARP UPDATED

This an update of this post below: IPOs on buys.

As outline in that post, all three of these recent stock IPOs were crossing the highs of their first day of trading (the “IPO Day”).

Once in the trade, stops, at the individual trader’s discretion, can be on a close below the IPO-Day high (which is what I would use), or if one has the patience and risk tolerance as far down as the low of that day.

The numbers in the white flags on the charts below are the gains per $10K invested in each stock. The numbers, at 10K, also correspond to the percentage gains (for instance GOSS is on today’s close up 12%).

(click on the chart panel for a larger view)

#IPOs for “Dummies” – $GOSS, $ALEC, $HARP on buys

Took a look at some recent IPOs since this is one of the easiest trades any trader and investor can make.

I don’t mean being on the inside, or some investment house’s favorite client, or some politician on the take. This when to buy a newly-issue stock offering AFTER it come public.

The strategy is outlined in this post below:

Buying IPOs For Dummies

Don’t mean to insult all those guys who went to Harvard and Wharton and Stern, but simple is best and there is no simpler trade than this.

Note the range on the first day of the IPO’s trading. The buy signal is a close above the high. It is too difficult usually to short these stocks so let’s set that aside for now. The stop loss after the buy is up to the individual trader’s or investor’s risk tolerance. It a can be as close as the price coming back below the first day’s high or as far away as falling through the first’s low.

Below are the charts of the selected recent examples for the stock symbol GOSS, ALEX, and HARP. I have no idea what these companies do nor how qualified they were to sell stock to the public.

This purely a technical analysis entry signal. GOSS was a buy above $19 on today’s open is currently up 1.9%; ALEC was above 19.50 on today’s open is up 4.9%; and HARP was a buy on Friday’s open and is at the moment up 6.1%. The numbers in the white flags on the lower right of each chart is the dollar gain per $10K invested.

Needless to say, as indicated by those quick gains, the first-day high is an important line to play.

(click on the chart panel for a larger view)

#MarijuanaStocks – gains are high in the weed patch

The vast majority of stocks move with the market. And some stocks move more than others, both up and down.

Take the marijuana stocks as the prime example.

At what may have been the end of the bull market last August, this newcomer stock sector was leading the market (a telling sign the bull was getting too high) and with the fall in the Fall, its stocks all went down together.

Even the sector’s leaders took a drubbing CGC, which Constellation Brands had just put a ton of investment money into, dropped from a high of $59 to a recent low of $24. TLRY, an extremely hot IPO screamed crazily from its IPO price close of $22 to a high of $300 in two months (its founder may have been the fourth richest man in the world for one day…on weed) and then plunged to an almost still respectable low of $70.

What fundamentally changed at those companies in the three months the market sold off and took them down? No much, if anything at all.

So coming into the market bottom, that was an obvious vibrant sector that needed to be watched for a big bounce.

And, indeed, the marijuana stocks have not disappointed any swing traders looking to make bear-market rally plays (see the chart panel below). Since the December 26th blog buy signal here, CGC has rocketed 52%, CRON 27%, GWPH 31%, ACB 37%, and TLRY had gained 37% until it was knocked down to a “mere” 13% gain in today’s action.

That hit on TLRY today is why I bring all this up now.

There is speculation TLRY’s drop was caused by fear that an expiration of the lock-up period on IPO insiders would bring on selling, a self-fulfilling prophesy if ever there was one but then most moves in the market usually are. With the exception of GWPH, the granddaddy stock in the sector, the rest of the stocks took hits in one way or another today along with TLRY.

It was on some news, profit-taking, whatever, but it was a hit in the leading sector on a market up day. That is an alert.

In the blog post below the suggestion was and still is to play defense, defense, defense during this rapid rise in the market because of the likelihood this is a bear-market bounce that can go ragged at any moment, and in some sectors die on a dime.

Bull markets end and bear markets begin on one down day. And sector rallies do the same.

Today may or may not be the end-of-the-swing day in the weed patch, but it turns out to be, as we used to say in the 60s and 70s and the bear can growl now: “Don’t bogart that joint, my friend.”

(click on the chart panel for a larger view)

$TLRY – When the dummy becomes the genius

Can a dummy become a genius?

With the right setup and a dose of luck, in stock trading, of course. Maybe not to the level I am about to chart (see below), but it happens more often one might think.

It’s the setup that creates the luck. And it takes persistence and experience to recognize the opportunity, and discipline to play it out.

In this link in early August – Buying IPOs For Dummies— I suggested the setup:

In the tradition of the “For Dummies” books, I give you the short and sweet on trading and/or investing in IPOs:

Buying into an IPOs is actually one of the easiest decisions in stock investing but never let a broker con you into doing it the day of the offering.

Instead, note the high price and the low price on the first IPO is traded. Those are the lines in the sand or the Darvas box around the first day of trading (see the charts below). The time to buy, invest, is on a close above the high of the first day with a stop loss below the high of the first day.

That is usually a low-risk trade since the real good news comes when the stock proves it can move up from all the hype surrounding the offering itself and if it falls back the stop to exit can close by and obvious – either below the high of the opening day or below the low of the opening day depending one’s own time parameters and risk tolerance.

Whatever the latest stock IPO, there is nothing more to say except maybe “Keep it simple, dummy!”

That having been said, let’s take TLRY (Tilray, Inc.), a timely recent IPO launched in the wake of the Canadian legalization of all marijuana products.

Talking about smokin’ hot! According to the setup (see the chart below), that was a buy at the $29.77 close the day after its IPO day, July 20th. If one happened to gamble on it as it gaped above its IPO high that day at $24.25 or so, all the better. At $29.77 it is now up 400% in two months.

This is a stock!

Granted this doesn’t happen this big this often — this took a MASSIVE DOSE OF LUCK — but it does happen regularly to a lesser degree (maybe I’ll bring up MESA next time).

By the way, if TLRY breaks that fast average on the chart be ready to get out of Dodge. That’s a parabolic and it’s likely to be a violent break. In fact today (at the moment) looks like a blow off. Might want to leave town any minute…

(click on the chart for a larger view)

Buying IPOs For Dummies

In the tradition of the “For Dummies” books, I give you the short and sweet on trading and/or investing in IPOs:

Buying into an IPO is actually one of the easiest decisions in stock investing but never let a broker con you into doing it the day of the offering.

Instead, note the high price and the low price on the first IPO is traded. Those are the lines in the sand or the Darvas box around the first day of trading (see the charts below). The time to buy, invest, is on a close above the high of the first day with a stop loss below the high of the first day.

That is usually a low-risk trade since the real good news comes when the stock proves it can move up from all the hype surrounding the offering itself and if it falls back the stop to exit can close by and obvious – either below the high of the opening day or below the low of the opening day depending one’s own time parameters and risk tolerance.

Whatever the latest stock IPO, there is nothing more to say except maybe “Keep it simple, dummy!”

$DBX – An IPO easy to buy at the right price…

When a hot IPO is launched, as was the case with Dropbox (DBX) yesterday, the headlines are usually how much it leaped over it initial offer price. That is a worthless commentary. Unless one is on some broker’s favored clientele list, it is impossible to have the stock and to be able to sell it on that leap.

So what to do?

With IPOs this is actually one of the easiest decisions in stock trading. Simply note the high price and the low price on day one of the IPO. Those are the lines in the sand.

Buy on a close above the high of the first with a stop loss below the high of the first day. With DBX that buy is a close above 31.60. If the stock drops back below that number, take the loss (likely small) and forego the anxiety of being locked into a foolish IPO buy made on whatever day. If it rallies from there, it could trend up and become a longer-term investment.