Fiverr (FVRR) IPO: Example of Short-Term Price Analysis

Discussion in 'Tutorials, lessons, examples and training' started by Blaine Tarr, Jun 14, 2019.

  1. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    FVRR - What an IPO! Plenty of setups to get long today.

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    A 'setup' is simply the anticipation of demand > supply or vice versa. Being able to identify a supply (resistance) level and anticipate a move up as demand (support) starts to 'breakout' a stock is key to being a successful short-term trader.

    Demand can come in many forms: Perceived positive news, hedge fund buying, day-traders, algorithms, an Investment Advisor raises the target price so brokers call clients to get them to buy, shorts have to buy to cover, FOMO chasers, etc. It really doesn't matter why the buyers are present, but that you can identify this action and join the trend.

    As a trader, our job is to anticipate the move as analyzed through the price action. Becoming emotionally invested in a news story or earnings report turns you into an investor rather than a trader. You'll find yourself not sticking to price action rules. Traders focus on price action, Investors follow stories, earnings, future valuation estimations; etc. If you want to be a serious short term trader live by this:
    Know the news, Trade the action.

    When to take profit or cut losses you ask? General principles: Knowing when a trend speeds up (Bump & Run) is a great identifier of a short-term top. 1) Sell into speed ups and/or uptrend fails. 2) Set a stop at even if the trade is working. Never let a winner turn into a loser. 3) Know your risk going into the trade, so if the breakout fails, you can bail and lose as little as possible. Save capital for the next trade. If you're worried about the pattern day-trade rule, check out a few solutions here to calm your nerves.

    Okay, enough education for one night, read the watchlist for 6/14/19 here. Including FVRR LYFT DIS NFLX & SNAP.
     
  2. Blaine Tarr

    Blaine Tarr forum leader won penny contest 24x won weekly contest 20x

    BHAT another IPO with great price action to study. Check the 1 - minute chart and draw the line at 4.80. Builds into a new trend that speeds up towards 6.25. That was the trade. Notice the trend fail and right back down. You can learn to identify these levels! 6.25 is now a new resistance level.

    If you ever hear anyone say that you can't use TA on IPO's - they have limited trading experience. I would argue, IPO's are some of the easiest charts to read because there are only new levels to build from. No old baggage levels from years ago to worry about.
     

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