Impinj (PI) began trading on July 21st at $18. It’s now bumping against $40. I think the life of Pi is going to be extended for a while. The tiger is still in the boat. (December 20, 2016)
PI
Today I want to look at PI ( NASDAQ:PI ), which is more than just a really, really big, long number, 3.141592653585 to be exact. Anyway, this is a RFID solution company. They have really strong revenue growth; I checked out the fundamentals. The reason that I like the stock is because it fits my IPO strategy; where you take a stock, an initial public offering, at some point the stock peaks in what I call an enthusiasm high. We are here at the end of December so you can look at where that peak was. It might be here, could be here, right now I am saying it is here, because we have got all this trading behind us.
The idea is that once a stock peaks and then it starts to move lower now you are in this trading range, from where the stock started trading and where it is trading here at the top. You stretch that over here and this is the deal: As the stock moves higher to new highs, suddenly everybody’s a winner. Everybody who bought this stock is a winner. There is literally no overhead resistance other than just the, “Oops, I am feeling guilty about making so much money on the stock, so I am going to take profits.” That is kind of the stage that we are in here with Inpinj ( NASDAQ:PI ). The bottom line is this: I like this stock right here. Now with this thing up on volume, not due to announce earnings until the first part of February, I think this stock is poised to move higher.
The way you want to trade this is, if you are going to buy some stock on this technical breakout here then keep a stop at 8 percent or so, use the, you know, the William O’Neil method, be right around 36ish. I would even maybe buy a little lighter, a little bit smaller position so you could stay in the position longer if the stock does pullback to here. But the bottom line is this: I think this stock is going higher from here. It is extended, but the thing is you don’t want to necessarily shy away from stocks that are extended; because they tend to be extended for a reason. You just have to respect the buying interest and the buying activity and make sure that if a stock is too extended you either wait for a pullback or in this case maybe buy a little more lightly than you normally would.
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