Scott Redler: Pinterest, Zoom, Lyft, and What’s Next

On Thursday, I appeared on the TD Ameritrade Network with my friend Nicole Petallides to discuss the big Pinterest (PINS) and Zoom (ZM) IPO's.

(click the play button to watch)

We're​ going to talk about what happened on Thursday.

But before we get into that, I want to lay out ​the main principle from my 'Art of the First Day' IPO strategy.

​When it comes to judging new issues, I don't focus on valuations or fundamentals. Instead, I look at supply and demand. The market action -- especially the initial pivot highs -- will tell you which IPO's are hot, and which ones aren't.

Lyft (LYFT) failed early because there were too many shares up for sale. It quickly lost its initial lows and fell apart:

Now let's look at a recent IPO that had more demand than supply.

Jumia (JMIA) is a perfect example of too many buyers not chasing enough shares. This is what F.O.M.O. looks like:

Zoom priced its deal at $36. 

And in 1999-style, it opened at $65 and put in a high at $66. This may be a case of too much, too fast.

The low was $60.32, and it closed at $62.

Here's how I'm looking at ZM now​: it already made a massive move and there's a lot of room between here and the $36 IPO price. 

Right now, I want to stay flat. If it breaks $60, the lucky longs could get nervous and start cashing in. And shorts might step up too.

If it can hold for a few days, I might buy on a close above $66.

Now let's talk about Pinterest.

Pinterest priced at $19. The stock then opened at $23.75. It hit a high of $25.18, a low of $23.05, and it closed at $24.54.

Now it needs to hold that $23.05 low.  If that breaks, I'll have to reconsider my long.

If it can get above $25.18, perhaps there's a multi-day run.

​Positions Disclosure: As of April 22, 2019 at 9:07 a.m. ET, Scott J. Redler was long ACB, BAC, ZYNE, AAPL, PINS, TWTR calls, AMRN calls