- The cool thing about an IPO is that it's new & exciting. Then again, new & exciting can be deceiving...
Any technical investor will tell you that it's nice to know where a stock has been in order to ponder where the stock might go. An IPO doesn't give the investor that luxury.
So what can you do? You can pay attention to shorter time frames while using the same investing & trading rules that you normally do. Just realize that you will get more buy & sell signals so you will either buy & sell more often or you will take on more risk. Caution: if you don't watch your stocks every day you probably shouldn't be investing in an IPO.
- GPRO started trading and was off to the races. After a couple days we all wondered where it would stop.
I don't have time to finish this now as it is very" early in the morning" and I need a little sleep. I will try to come back and edit this post soon but check out the pictures below. They tell a pretty good story on their own.
Remember to always look at multiple time frames. In this case I am using the weekly, daily, and hourly. You could look at the 30 minute, the 15 minute, the 5 minute, etc and see a lot more UT & DT lines. The important part is seeing when the price crosses the lines.
That is where the change in direction occurs. Have fun...
OK. I'm back...
Turns out GPRO stopped right around $50. Ever heard anyone say "round numbers are like hurdles"? Now you know why. Is there any way you could have known that it was going to stop there? I don't think so. But I do think you had some clues right up there at the top. Take a look at the hourly chart below. After a steady run up, the price crossed below UT 1 (look inside the circle near the top). When that happened it was a clue. Yip, just a clue. But you can act on clues. This was a clue to lighten up or just take notice.
On July 2nd, GPRO opened down. That's not good. Then it closed the first hour below the low of the previous day (July 1). That was your second clue. Yip, just a clue.
- Fast forward a couple days and you will notice the price creates a trading range.
GPRO trades between $40.50 and $44 for five days. I call that indecision. It is only a matter of time before the investing community decides what they think. If they think GPRO is worth more than $44 then it will go above the range. If they think it is worth less than $40.50 then it will drop below the range. It is your job to wait for decision to be made and show up on the chart. Then follow!
This is a weekly chart of GPRO - please ignore the lines on the right
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| Click here to enlarge this chart of GPRO |
This is a daily chart of GPRO
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| Click here to enlarge this chart of GPRO |
This is an hourly chart of GPRO
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| Click here to enlarge this chart of GPRO |
- If you are looking at this hourly chart and you believe that GPRO may continue to fall, what is the next level to anticipate? And the next? And the next? One more please. What if it goes below there??? Let's just say I hope you used one of the circle areas to get out of this stock with a profit. That way you can try shorting it if you like or just sit back and watch. It will stop going down at some point. When it crosses a downtrend line you can use some of your winnings to try to make more money :)
Answers to the above questions...
Price level below $40.50 ish is $38.00 ish / Price level below $38.00 ish is $35.00 ish / Price level below $35.00 ish is $32.00 ish / Price level below $32.00 ish is $28.65 ish - why $28.65 you ask. That was the opening print
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- Going Down??? I feel like this post is getting a little long in the tooth but here is some cool stuff that happened today
Take a look at the hourly chart that includes today's activity. It clearly shows a downward continuation at the open and then some sideways movement for the rest of today. First, it is nice to see things like that long red candle at the end of Friday that broke the trading range and have a clue that it might lead to more downside. Second, it is nice to notice the indecision for most of the day today and realize that there will be a clue about future direction when it breaks. "Breaks" doesn't necessarily mean keep falling either.
If you are short GPRO, you can stay with your short until the price closes above DT 2. Remember that it is normal to make slight adjustments to UT & DT lines as you get more candles.
If you want to get long GPRO, you should wait until the price closes above DT 2. Be cautious, limit your risk, and get out of the way if you are wrong. Don't take it personal. You are trying to predict the future. That isn't easy for anyone I know. Making mistakes is part of the biz. Keeping enough money in your pocket to be in business tomorrow is imperative.
This is an hourly chart of GPRO from 7/14
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| Click here to enlarge this chart of GPRO |
- If you made it this far I thank you. I think you deserve something a little above and beyond the basics.
This chart includes Fibonacci Retracement lines. It is amazing how well the UT & DT lines work but when you add in the Fibs you get even more information...
Take a look at the 5 day area of indecision. It had a low right at the 38.2% retracement line. Coincidence?? Now take a look at the low end of the candles for today (7/14). Notice the lows are very close to the 61.8% retracement?
Remember that all of these retracement lines are common places to look for price to change direction. The faster it happens the stronger the stock some people say. All I am going to say is that it pays to pay attention to UT & DT lines, previous levels of support & resistance, and Fibonacci Retracements.
This is an hourly chart of GPRO from 7/14
with Fibonacci Retracement
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| Click here to enlarge this chart of GPRO |
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