Looking for a couple of stocks that fit my IPO trading template? These two will do. (February 16, 2018)


Let’s look at Casa ( NASDAQ: CASA ), more than the name of a house in Spanish. A nice company, an IBD 50 stock. A great opportunity to buy down here; we were looking at this last week, channel stock, easy, easy channel stock, support right around 17.50-18.00, resistance now, I would say around 21.00. So this has almost 10 percent left in it before it really comes up and tests resistance. Given that, this a stock, you are a day late, maybe two if you were really being precise but it still is a stock that is going to work.

What I like about this is, it is an IPO, this thing just kept on going. I would look at this as, what I call our “enthusiasm high”. Where a stock opens for trading and whether it peaks on the first day or a week later or a month later or a year later at some point it stops moving up. There is a definitive reversal and we see that here. Once that happens then you look for the floor, now you have got a channel. The real key buy point is really not here, you can get kind of an early entry here. The key buy point is right here when the stock breaks out to a new high. Again, I just call it the enthusiasm high, for lack of imagination. If you have got a different term email me and let me know what it is, if I like it I will make you famous.

As I look at this, on this particular day, the 5th, a lot of stuff happened on February 5th, this stock hit 22.50 so I guess you could say this is the ultimate high because it peaked intraday. But as I really look at this; I am looking at this high right here, this is the high, 21.32. If this stock starts trading ABOVE 21.32, that is when I want to add some more to this position. I am just kind of happy holding this position. I am not really trading a channel here; I am holding this stock, small position, waiting to see whether the stock breaks out. If it does I will ADD to that position. If it starts rolling over I will probably take some profits. That is how you want to trade these recent IPOs.

Another one that is kind of similar here is Roku ( NASDAQ: ROKU ). This was one of those that the real enthusiasm high, I think you could say, was on the second day. The stock had almost doubled from where it opened up, that kind of qualifies as an enthusiasm high. The real trade here was actually when it broke 30.00. You could say, “Well man, you could have bought it at 19.00.” Yes, I know but I didn’t, sorry. But now when it trades above $30.00 that is a surpassing of the enthusiasm high; you don’t get the first 100 percent but you get the second one. Roku ( NASDAQ: ROKU ) is working in kind of a similar fashion as Casa ( NASDAQ: CASA ). Either one of these or both are stocks that you should be looking at to trade next week.

Free Chart

Leave a Comment