If you are a swing trader, you must know what makes for an explosive stock. The best swing trade setups have:
1) a catalyst
2) a move over a major support level
3) strong price action
4) volume that propels the stock
5) a sector that is on the move along with the stock
6) the “it” factor
What is the “it” factor? It can’t be defined, but you know it when you see it. Right now, many “it factor” stocks are recent IPOs.
ONCE satisfies 5 of the 6 requirements for a great swing trade setup. The fact that it is an IPO and is being talked about qualifies as a catalyst in this market. It broke out over it consolidation range at $49 (2) & (3), is in the market leading biotech sector (5) and again, is an IPO in a hot sector (6).
While it lacks explosive volume, it won’t take much to make it move and intra-day volume suggests accumulation.
I will look to enter on a pullback to the consolidation range.
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