How to Trade IPO’s Hit and Run Style

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Hot IPO’s are the heart and soul of speculative sentiment.

On Thursday, July 22, Hit & Run had two recent hot IPO’s, DOCS and DLO,  on its long radar.

DOCS was a long idea on Wednesday night’s (7u/21) Hit & Run Nightly Stock Report.

The setup was based on a Cup & low Handle pattern.

 

The right side of the Cup was incomplete, but when you put your thumb over the solitary spike high from June 29th, the setup is easier to see.

The ‘low’ Handle often times sets up early entry or what I call a Cheetah (as in Cheater entry because the stock has not ‘come out’ yet officially).

DOCS large range  relative strength rally on Monday as the market was getting smacked put DOCS back on my long radar.

As well DOCS Monday rally was on an expansion of volume.

Two inside days of consolidation followed with volume contracting on Wednesday as DOCS carved out a 180 buy setup.

In other words, DOCS closed near session lows on Tuesday but closed at session highs on Wednesday within the context of Monday’s Torpedo—“damn the torpedo’s, full steam ahead.”

Consequently, we used DOCS as a long setup for Thursday.

A 10 min shows Hit & Run subscribers were triggered long out of the gate on Thursday.

DOCS exploded 6 points in 40 minutes before pulling back.

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The following tweets from the Hit & Run Private Twitter Feed follow the play.

DLO is another hot IPO that went on our long radar on Monday as it turned its 3 Day Chart down for the first time since going public.

As well, compellingly, DLO also turned its 3 Week Chart down on Monday.

The 3 Day Chart turns down with 3 consecutive lower daily lows.

The 3 Week Chart turns down with 3 consecutive lower weekly lows.

DLO exploded on Tuesday after satisfying turndowns of both its 3 Day and 3 Week Charts.

The Rule of Multiples was on the table.

Wednesday DLO consolidated as depicted in the 10 min DLO below.

Notice DLO’s Late Day Breakout (LDBO) on Thursday over 50.

The following alerts on the Hit & Run Private Twitter Feed show our play.

In sum, it pays to track strong interest in IPO’s after their initial surge and subsequent pullback once the hot money has flipped them.

Not only because it presents a buying opportunity, but often times it also reflects underlying overall market sentiment pointing the way to market direction.

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