Hello everyone. @szaman here. We had a nice trade on YELP in the chat room today. Here’s the setup explained.
In his book “Hit and Run Trading 2”, Jeff Cooper talks about a trading technique called , “Hot IPO Pullback”
setup”. The rule basically is , Hot IPO debuted and traded at least 15% higher than its offering price.
We wait for 2 to 4 days of pullback.After the second , third or fourth day, we will buy the stock right above previous day’s high with stop below previous day’s low.
setup”. The rule basically is , Hot IPO debuted and traded at least 15% higher than its offering price.
We wait for 2 to 4 days of pullback.After the second , third or fourth day, we will buy the stock right above previous day’s high with stop below previous day’s low.
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| YELP was offered at 15 per share on 03/01.12 and day high was $26. For next 5 days stock kept on pulling back. Today YELP held yesterday’s low . I had an alert setup above whole number $20 with a secondary alert at yesterday’s high 20.40. |
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The stock moved over $20 really quick to secondary alert20.40. No entry here because it was way too far from morning low 19.52.So I waited, stock bases nicely below 20.40 as 9 EMA/5 min catches up. Entry was 20.38 with stop below 20.20. We took some of at 21.70’s for almost 7% gain with tiny .18c risk.
Second entry was around the end of the day for a scalp when it took out intraday high 21.83 for a quick .70c gain. Hope this helps and adds another ammunition in your trading arsenal.
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Nice trade szeman. How do you feel about shorting IPOs within the first couple days? Or are they generally not available to be shorted because of poeple like me who would just make all their money off other peoples’ misery? Haha
Usually you have to wait few days to find shorts for IPO’s.
That’s what I thought, thanks!
there is a period of days i think its 3 days. Even then sometimes these ipo’s only release a small portion of their float so its tough to find shares to short on them also
szaman can you use the please
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ok it wont let me type it. what i meant was if you could please use the alert signals (buy/sell)