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:
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.