Are you getting an early jump on my IPO strategy (June 12, 2012)
PSX
I’m Dan Fitzpatrick at StockMarketMentor.com on Tuesday, June 12th. I’m going to look at a ticker here PSX ( $PSX Phillips 66 ), that you probably haven’t heard of. This is a spin-off from ConocoPhillips ( $COP ) in April, Phillip 66 ( $PSX ), they’ve got three segments, quick fundamental take, three segments, chemicals, midstream, and refining, right? Okay, take away refining, which is kind of a horrible business, though in this case is actually kind of works; midstream and chemicals those two segments are worth like $31.00 a share; that would put it like right here if they totally got rid of the refining, not going to do that, refining still makes money, this is actually for reasons that are beyond the scope of this video, trading at a lower multiple with respect to their refining segment, than it really could if the different segments were valued by the way they should be. I’m not talking about any of that, I just want to give you a little background on the stock since you may not have heard of it. What I’m talking about is an IPO strategy; this is a strategy that I’ve been using for a long time, typically with a great deal of success, which I’ll explain very quickly. This was where the stock opened up like when it first started trading; enthusiasm high, boom, right up there and then promptly sold off, okay. It is now still below this initial, what I call enthusiasm high; so it’s still below this, which means that those few folks who bought, because if you just look at that the volume, look at this here, move this over, anybody who bought above this line is still a loser; now we look at the volume here, so we got this trading volume, not a whole lot. Everybody who bought, and is still holding, except the folks who bought on these two bars on the first two days, everybody’s still a winner. Okay, what I technically like to do is wait for the stock to surpass that high, that initial high, so that every single person who bought this stock, who is still holding on, every single person is a winner; that means that there’s really no overhead supply, now we can talk about all the lock-up period and exploration and all that, I don’t care about that right now I’m just talking about the chart. The idea is again, you wait to buy a stock like this, on this particular strategy, you wait to buy it until it actually breaks out to a new high, because then again, you’ve got no losers, no supply from the folks who just want to get their money back. There might be other sources of supply, but no supply from regretful, prior buyers, right? The reason I’m looking at this and want to be taking some stock now, is because, first of all, the stocks in a nice uptrend here, second of all ,as noted, the volume of those folks who are still quote, losers, is very small, meaning that just about everybody who’s in the stock now is profitable; that clears the way for higher prices and also it’s not lost on me, that this is in the energy sector, that sector has absolutely stunk up the joint, and I would not want to be buying any stock in the energy sector, except a stock that looks like this. So what I’m saying this, you look to take some Philips 66 ( $PSX Phillips 66 ) here, follow these intraday lows, you want to make sure that this continues to track along the upper Bollinger Band, setting higher intraday lows, I’m not expecting huge moves out of this in the next day or two, though we might, but what I am looking for are higher prices, I’m looking for this to surpass this high back here and ultimately print new highs and make us a really nice trade. Okay members, let’s get going; go over the Strategy Session, I have several stocks on the retail sector and also a bit of a tutorial for you on knowing when you’re wrong. Free Chart