Private companies make the shift to the public markets through an initial public offering (IPO) often represent the most promising of business ideas, often high assessments on the heights, the expectations of the investors. Not surprisingly, the IPO market has been relatively calm in recent months, which means that traders have had the opportunity to look back at some of the more popular Ipos of the past year or two, and determine how they are doing compared to their initial expectations. These public companies that have been able to meet or exceed their initial expectations could be a good way to find portfolio worthy of investment candidates.
The Renaissance IPO ETF (IPO)
Investors who are looking to analyze companies that have gone public over the past two years and that are not yet included in the main indices of the market often turn to exchange-traded products such as the POPE of the Renaissance ETF (IPO). As you can see on the chart below, the fund price has recently risen above the resistance of an influential trendline, which will likely be used by traders to mark the beginning of the next stage of a major upward trend. Some traders will most likely want to use the recent retracement towards the support of the 50-day moving average ($41.65) as an opportunity to add to their positions and to maximize their risk-to-reward ratio. From a risk management perspective, stop-loss orders will probably be placed below $33.43 in the case of a sudden change in a broad sense of the market.
Zoom Video Communications, Inc. (ZM)
The addition of the trust on the electronic video communication over the past few months has put the Zoom Video Communications, Inc. (ZM) in the spotlight of investors and consumers. As you can see on the chart below, the price has been trading along a well-defined upward trendline and its 50-day moving average since the beginning of February. These strong areas of support have given levels for the investment or buy and stop orders, and many traders will likely continue to use these levels in the weeks to come.
Pinterest, Inc. (PIN)
As another top holding of the ipo ETF, Pinterest, Inc. (PIN) will be more likely to catch the attention of traders in the days to come. Solid quarterly results and an analyst upgrade have combined to fuel a break above a key level of resistance, shown on the map by the blue circle, which, from a trader’s point of view, could mark the beginning of a great upward movement. Stop-loss will probably be placed below the dotted trendline or the 50-day and 200-day moving averages, as a function of the risk tolerance and outlook.
The Bottom Line
Despite a relative slowdown in global industrial property Offices of the end, companies that have gone public over the past two years could be interesting to take a closer look. Now that the companies have several quarters of earnings history behind them, operators need to be able to get a good sense of the existence or non-existence of high expectations around their intellectual property Offices have proven to be valid.
At the time of writing, Casey Murphy did not own a position in any of the assets mentioned.