Hot IPO Cup & Handle Strategy: PRLD

In the late 1990s when hot internet IPO’s were exploding all over the tape, I developed the Hot IPO Pullback strategy to take advantage of continuation after the hot money had flipped out.

20 years later the strategy still does a great job of identifying when these Hot IPO’s will be on the prowl — with a twist.

Once everyone knows a strategy on Wall Street, Mr. Market has a way of trying to foil what everyone knows.

Currently many Hot IPO’s are seeing much deeper pullbacks rather than the shallow pullbacks in the heady irrational exuberant days of the late 1990s.

Currently more of a base is playing out before the Hot IPO’s take off.

Today it’s the biotechs rather than the internet names that are the apple of the bull's IPO eye.

PRLD is a good example of what I call a Hot IPO Cup & Handle

Notice the well defined Cup and the 1 2 3 Pullback into Tuesday before PRLD turned up on Friday.

The right side of the Cup played out when PRLD “came-out” of a Slim Jim flat-line consolidation.

This kind of breakout below the typical breakout buy pivot is what I call a Cheetah (Cheater) entry.

On Friday, PRLD attacked the lips of the Cup. In so doing, it left a Peekaboo New High Close.

In other words it closed at a “veiled” new high below prior intraday highs.

Whether PRLD consolidates at the region of prior highs or accelerates from here is to be determined, but the Line of Least Resistance appears higher.

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